Embattled slot machine and casino operator Entertainment Gaming Asia (EGA), a subsidiary of Macau-based gaming giant Melco, has sold its Dreamworld-branded Pailin casino.
In a filing to the US-based Nasdaq stock exchange dated June 26, EGA confirmed the sale of its Thai border casino to a local Cambodian investor for a bottom-dollar price of $500,000.
“While operating losses for Dreamworld Pailin have narrowed in recent months, due to an inability to secure a long-term third-party table game operator, a low level of natural player traffic and the political unrest in Thailand . . . the Company entered into an agreement to sell 100 per cent of the issued shares of DWP to the Purchaser,” the statement reads.
With an initial investment of $2.5 million, EGA built and opened Dreamworld Pailin in May 2012 under a lease agreement with an unnamed local land owner. According to the June 26 statement, the purchaser of EGA’s Dreamworld Pailin is a relative of the existing land owner.
“The parties expect to complete the sale transaction subject to the purchaser’s receipt of certain government approvals, which is expected within the next few months,” the statement says.
Dreamworld Pailin was EGA’s first casino operation in Cambodia, with 30 gaming tables and 40 company-owned slot machines. The company also operates a slot machine hall in another Dreamworld branded casino located in Poipet town.
The announcement comes after the firm in January wrote off its initial $2.5 million investment in the Pailin casino as a complete loss and after a string of poor results for the company both domestically and abroad.
In May, EGA reported a 29 per cent decline in total revenue during the first three months of the year.
Gaming operations revenue reached $4.1 million for the company in the first quarter, down 25 per cent from $5.5 million during the first quarter in 2013. Revenue from the 1,100 slot machines EGA operates across its two Dreamworld casinos on the Cambodia-Thailand border, NagaWorld in Phnom Penh and Thansur Bokor in Kampot province reached $2.9 million, down 10 per cent on the previous year’s results.
On April 17, US securities exchange Nasdaq issued EGA with a warning that it was in breach of the minimum bid requirements of at least $1 per share.
Nasdaq granted EGA a 180-day grace period to return its share price to the minimum requirement.
If EGA fails to meet the minimum bid for 10 consecutive days by October 14, and through a second 180-day grace period, the company may be delisted entirely. EGA’s share price is yet to meet the minimum price requirements, closing at 0.81 US cents at Friday’s close.
EGA declined to provide any comment on the sale of Dreamworld Pailin or its future operations.
Ros Phirun, spokesman for the Ministry of Economy and Finance’s department of casinos and gaming, said the government was aware of the sale and that EGA’s Pailin operation intended to file for bankruptcy.
“[We] did receive information about Dreamworld filing for bankruptcy. We already sent staff to have on site inspection. They confirmed shutting down the Dreamworld business,” Phirun told the Post.
Up to six casinos within Cambodia are reportedly facing bankruptcy, according to the ministry official.