Iao Kun Group denied Hong Kong Stock Exchange listing

Wednesday 11th of February 2015

Junket operator Iao Kun Group Holdings said the Hong Kong Stock Exchange has denied its application for a secondary listing of its shares.

The Nasdaq-listed company said it had received a letter from the Hong Kong exchange that said that “due to the declining financial performance of the company, the unpredictability of the company's revenues, the overall market conditions and the near term industrial outlook in Macau, and certain related party payments made to Pak Si, the Stock Exchange is unable to proceed further with the company's listing application at this time.”

Iao Kun said in a press release that despite the exchange’s reservations, the group’s underlying business is sound and the current downturn is only temporary, reflecting slowing growth in China and a tightening in its credit extension policies.

The group’s non-GAAP income decreased from US$76.1 million in 2011 to $61.6 million in 2012 and further decreased to $31.0 million in 2013, however, it noted that gross gaming revenue remained relatively constant at about $250.6 million in 2011, $236.3 million for 2012 and $236.9 million for 2013, with an estimate of $230.0 million for 2014.

“The company is still committed to the Macau VIP gaming segment, it is in compliance with all relevant laws and regulations and believes that it is among the most financially healthy gaming promoters in Macau,” the release said.

Iao Kun added that it plans to further expand by looking for new VIP room opportunities in new locations, as well as strategic investments.

The group had sought the Hong Kong listing to raise its profile and diversify its shareholding base.