Money

Tiger Palace Resort puts its property up for sale

- ANIL GIRI, SANGAM PRASAIN, Kathmandu

May 29, 2019-

At least four top Nepali companies are vying to buy the Tiger Palace Casino Resort in Bhairahawa after the Australia-based casino operator Silver Heritage Group put its Nepal operation up for sale or partnership.

The business deal for the casino resort is worth $33 million, multiple sources familiar with the development said. Leading business houses like Chaudhary Group, IME Group, Vishal Group and a Nepali non-resident based in Malaysia are eying to take over the property, the sources added.

The 100-room property, which is the first integrated five-star casino resort in South Asia, was developed by the Australian-listed Silver Heritage Group. In the second phase, Silver Heritage plans to offer 400 guest rooms. It was awarded a five-star rating by the Department of Tourism in November 2017.

Tiger Palace is spread over 15 bighas and features two villas, a gym, spa, swimming pool, restaurants and meeting and banquet facilities suitable for weddings. The resort has a 2,471 square-metre casino floor.

The sources said that the company’s share price plunged to the all-time low in Australia and it failed to generate funds which prompted the company to sell its Nepal’s property.

The once sleepy town of Bhairahawa has started to attract hordes of investors following the construction of Nepal’s second international airport. Bhairahawa is also expected to become Nepal’s second largest tourist destination after Kathmandu once the airport is constructed. The airport is expected to come into operation by the beginning of next year.

A senior official at the Chaudhary Group told the Post that there is “nothing concrete” but initial talks are going on at this moment. Likewise, Chairman of the IME group, Chandra Dhakal, said they are on the fray to take over the property.

The Silver Heritage Group said that since March, all casino operations at the Phoenix International Club in Bac Ninh, Vietnam have ceased. The casino will remain closed for an “indefinite period”, according to the reports.

The casino operator in a statement to its shareholders 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 $15,000”, it said. Established in Nepal in 2017, it was one of the largest foreign direct investment in the tourism industry with the approval of Rs5 billion, but it could only secure Rs3.60 billion. On the other hand, the resort in Bhairahawa has been involved in several controversies which made it difficult to operate.

One major controversy is the decision to build part of the property above a public canal. After the locals protested, the company assured to provide jobs to the affected people.

The sources said that it had also taken some of the land belonging to a local temple while building the construction. The Ministry of Home Affairs and District Administration Office, Rupandehi has been investigating on the matter. The gaming company, after failing to secure to another Rs1.30 billion foreign direct investment, had approached Nepali banks and secured some loans to build the resort in Bhairahawa. It has planned to construct a similar resort in Jhapa and has already acquired land.

According to the company’s website, the firm has secured a bridge loan of Rs50 million from Prime Commercial Bank at 13 percent annual interest rate.

After a series of operational weakness, the company is now considering its options, from looking for a strategic partnership to selling its operation in Nepal and has issued a public notice.

After several disputes and controversies, the company has hired boutique investment bank and advisory firm Union Gaming to provide support to the firm in their search for potential investors.

“The company has undertaken a number of initiatives to release capital out of its asset base, including the appointment of Union Gaming as its exclusive adviser in relation to locating potential strategic partners or purchasers of the company’s Nepal operations,” Silver Heritage stated in the filing with the Australian Securities Exchange recently.

Published: 29-05-2019 08:21

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