A Vietnam club just shut down a casino that delivers 45pc of Silver Heritage’s revenue
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Silver Heritage Group (ASX: SVH) has requested an immediate trading halt after receiving word that its table games would no longer be permitted to operate at the Phoenix International Club in Bac Ninh, Vietnam.
In a release to the ASX, the company said its turnover at Phoenix represented around 45 per cent of its unaudited revenue for 2018.
The notice it received from the general manager at Phoenix stated that table games were “no longer included in it revised Investment Certificate”. As of 6am local time, March 1, “all casino operations on the property have ceased”.
The casino will remain closed for an “indefinite period”.
Silver Heritage Group’s board will conduct a review on the legal basis of the notice, its rights and obligations, and the impact of the notice on the company.
The company has been operates and managing casinos across Asia for more than a decade, and has enjoyed the “liberalisation of gaming regulations” and rising income levels in regard to its Chinese and Indian visitors.
But operating casinos in Vietnam in partnership with a licence holder, and in Nepal under its own licence, clearly comes with some risks.
In the same release to the ASX and shareholders, Silver Heritage also noted it had uncovered “accounting irregularities” in Nepal.
While investigations were limited, the “predominantly non-cash” irregularities nevertheless resulted in a cash cost to the business of “approximately US$15,000”.
Silver Heritage aren’t alone in discovering the pitfalls of rolling the dice in Asia.
The ASX-listed Donaco has seen its market value plummet from $290 million less than a year ago, to around $66 million today.
Plaguing Donaco has been claims of poaching key staff, a bitter fight with a former owner of one of its key assets, and the death of the Thai king, Bhumibol Adulyadej, which kept mourners away from gambling for up to three months.
SVH’s share price has been on a downward trajectory since hitting 12 cents at the start of last year, and is now sitting at 1 cent.