New Silkroad plans to raise $189 million

New Silkroad Culturaltainment Limited has announced it is planning to raise a minimum of HK$1.5 billion ($189 million) through a share offer to raise funds for the development of tourism and gaming projects on Jeju Island.

According to a filing to the Hong Kong Stock Exchange, the company said it plans to issue between 916.5 million and 976.9 million Offer Shares on the basis of two Offer Shares for every five existing shares, at the subscription price of HK$1.60 per share.

“The Open Offer will provide capital for the development of New Silkroad’s cultural tourism and gaming projects in Jeju Island. It will also help to reduce the Company’s financing cost and gearing ratio, enhance the financial position and future working capital base, further strengthening the Company’s capital structure and allow the Company the capacity to grasp the right investment opportunities as they arise,” said the company.

Paul Ng, executive director of New Silkroad, said: “With the booming gaming and cultural tourism industry in Jeju Island, we hope the Open Offer will equip us with a solid financial foundation for the development of a world-class gaming and entertainment complex and a large-scale tourist resort in South Korea. Through the Open Offer, we hope to provide all shareholders with an equal opportunity to participate in the long-term development of the Company which shall benefit the Company and the Shareholders as a whole. Our major shareholder’s commitment in fully underwriting the Offer Shares also demonstrates its confidence in the long-term development and prospects of the Company.”

The proposed Open Offer is subject to shareholders’ approval at the company’s special general meeting.