Macau gaming operator SJM Holdings recently announced that its net profit for the third quarter has significantly decreased by 91%, leading the company to abandon its acquisition plan for the satellite casino Ponte 16. This decision is based on a comprehensive business review, and employees will be reassigned to other casinos while the company continues to push forward with other acquisition projects.
Background of the Acquisition Termination
Due to the sharp 91% drop in net profit in the third quarter, SJM Holdings, after a business evaluation, announced that it will no longer proceed with the acquisition of Ponte 16. The company stated that the drop was significant, forcing them to shelve the plan. As part of the termination agreement, Ponte 16 will complete the transaction on November 28, with tables and slot machines being transferred to other casinos under its umbrella.
Progress of Other Acquisition Projects
SJM Group originally planned to close seven satellite hotels and acquire Ponte 16 and Macau Triumph Gate. The latter transaction is still ongoing, with the company having signed an agreement to acquire Triumph Gate Development Limited for HK$17.5 billion. SJM states that Triumph Gate is a property with excellent performance on the Macau Peninsula, and the acquisition of Arc Light Casino is also progressing to enhance operational efficiency.
Long-term Impact of Satellite Casino Closures
Macau Chief Executive Hou Hui stated that the closure of satellite casinos has a minimal impact on the financial system, with related loans accounting for less than 1% of total bank loans. However, analysts are concerned about the damage to community commercial activities. Scholar Xiao Guoqiang from the University of Macau warns that the closure could lead to a slowdown in consumer traffic, a reduction in job opportunities, and a potential drop in property values of up to 40%.
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