China Star grants $26m loan to Macau junket company

China Star Entertainment said it has agreed on a HK$200 million ($26 million) two-year loan to a Macau junket company buying itself time to evaluate the business before deciding on an acquisition.
The loan, which carries interest at 10 percent, is guaranteed by the junket’s sole director, named only as Mr. C, in a Hong Kong Stock Exchange filing.
The unnamed junket has been in business in Macau since 2006, promoting a total of 46 tables. The rolling chip turnover generated by the company for the 18 months ended 30 June 2014 amounted to approximately HK$357.38 billion.
China Star said the loan will generate a steady income stream, while providing the company with ample time to assess the performance of the junket operator before deciding on whether to make an acquisition.
The company has been increasing its exposure to the Macau junket sector and in February agreed to buy Protective Capital Group. While in April, Classic Champion, the China Star unit that will lend the money, also entered into similar loan agreements with two other junket promoters.