HONG KONG, Sept 25 (Reuters) - Imperial Pacific, a Hong Kong-based investment company, said it had more than doubled investment to $7 billion to build a casino resort in the western Pacific island of Saipan, while growth has been sluggish in top world gambling market Macau.
Imperial Pacific International Holdings Limited, an investor in Hengsheng Group, one of the largest junket operators in Macau, aims to build the new resort complex, which would have more than 4,000 hotel rooms, over five years with the final phase opening in 2020.
“As at the date of this announcement, the board intends to satisfy the development costs of the business plan by equity and or debt financing but has not yet formulated any concrete fund-raising plan,” the company said in a notice to the Hong Kong Stock Exchange on Thursday.
The casino would be the first large-scale integrated resort on Saipan, the largest island in the U.S. Commonwealth of the Northern Mariana Islands, which is a five-hour flight from Shanghai.
Like other junket operators, Hengsheng is trying to diversify away from Macau as growth in the world’s biggest gambling market slows this year due to a weaker Chinese economy and a pervasive crackdown on corruption by Beijing.
The cost of the integrated resort, previously estimated at $3 billion, is far larger than for those in casino hubs such as Macau or Singapore, where casino resorts typically cost around $4 billion.
The company had said in previous statements it was looking for a property in Saipan to build the resort after being granted a 25-year casino licence by the government of the Northern Marianas.
Junkets typically provide loans to wealthy Chinese gamblers, taking assets such as property and company equity as collateral. But with falling home prices and a squeeze on liquidity, over 14 small and mid-sized junket operators have been forced to shut down, and large operators are trying to consolidate.
Imperial Pacific’s bid to build a casino in Saipan comes as larger casino operators such as Las Vegas Sands and MGM Resorts scour Asia for new locations.
Saipan residents have objected to the casino proposal, prompting Imperial Pacific to promise to distribute cash vouchers worth $10 million.
The Hong Kong Securities and Futures Commission, the market regulator, has twice issued trading warnings over Imperial Pacific stocks this year. (editing by Jane Baird)