Success Universe disposes stake in China lottery business
Macau casino investor Success Universe Group Ltd. is disposing its stake in a gaming technology firm as it tries to mitigate its ballooning losses.
In a disclosure to the HongKong Stock Exchange on Friday, Success Universe announced that it is selling its stake and loans in Honour Rich China Development Ltd. at a loss to Wide Fortune Group Ltd for a sum of for HKD12 million (US$1.5 million).
Honour Rich, which was incorporated in the British Virgin Islands on September 21, 2010, provided technology services platform and related technical support for lottery in mainland China.
Success Universe cited the uncertainty brought by the continued suspension of the paperless lottery sales agency services as one of the primary reasons why it had decided to cut its exposure to Honour Rich.
It’s been more than two years since Beijing ordered a temporary suspension of online lottery sales after uncovering widespread fraud at provincial lottery administration centers. Until now, Beijing has yet to formally indicate when the suspension might be lifted.
“In view of the uncertainty regarding the paperless lottery business in the PRC, and indirectly also the uncertainty of the recovery of the Related Loan which is due from Mr. Wu, the ultimate beneficial owner of Up Fly, the Directors consider that the Disposal represents an opportunity for the Group to realize its residual investment in the Honour Rich Group,” the group said.
The sale, according Success Universe, will also relieve the company “from further need to inject working capital to sustain the operation of its [Honour Rich’s] business.”
Last month, Success Universe reported a 67 percent increase in its net loss during the January to June 30 period. The company said its net loss sagged to HKD21.1 million (US$2.7 million) in the first six months versus last year’s HK$12.6 million ($1.62 million).
Honour Rich, on the other hand, chalked net losses of HKD19.1 million and HKD20.8 million respectively in the financial years 2015 and 2016, with net liabilities reaching HKD92.8 million as of year ended December 31, 2016.
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