Tuesday, September 1, 2015

Aquis: drum beats from the circus tent

Despite no apparent real news the past week has seen further drum beating on Aquis at the Cairns Post:
Developer Tony Fung has listed his Aquis Entertainment company on the Australian Securities Exchange and last week announced a $330 million upgrade of the Canberra casino he paid $6 million for last year.

Old mate Nick Dalton reported this $330 million announcement last week. Actual real Aquis announcement to ASX in full which only came yesterday afternoon:

31 August 2015
Aquis Entertainment Limited (ASX: AQS) is pleased to announce that it has now successfully lodged with Invest Canberra its confidential proposal for a significant redevelopment of the Casino Canberra site. This is part of an ongoing dialogue with the ACT Government in relation to the future growth plans of Canberra Casino.

Curiously, I can't find that this, or the $330 million, has yet been reported anywhere else except Cairns? Not even in Canberra? It wasn't even flagged to ASX as price sensitive. The intention to submit a redevelopment proposal was included in the recent prospectus but with no information on cost or how it would be funded. The balance sheet for the newly listed entity has net assets of just $18 million which is not going to fund a $330 million redevelopment absent further capital.

As part of the backdoor listing a few million in further capital was raised via the prospectus at 20c / share. The offer had to be extended twice. With Fung holding almost 90% of shares market liquidity in AQS is going to be very low and the few trades since listing have been below 20c.

Ordinarily an ASX listed entity should have now posted half yearly results. Presumably this is waived and not feasible for AQS given the circumstances and time constraints? Consequently there doesn't appear to have been any trading update for the casino since the accounts for the year to December 2014 were lodged with ASIC in March?

An interesting aspect of the 2014 accounts is an apparent turnaround to profit for the Canberra Casino. However it turns out this is due to debt forgiveness by Casinos Austria of a $6.7 million loan which was booked to revenue. So having been paid only $6 million and then writing off a $6.7 million loan Casinos Austria have virtually paid Fung to take it away. Revenue for the 2014 year was down 10% on the previous year.

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