Australia-listed Silver Heritage Group has increased the budget for its integrated resort in Nepal by A$18 million ($13.8 million) to $70.3 million and said it’s in the process of raising more capital.
In a filing with the Australian Stock Exchange, the company said the timing for the completion of the Tiger Palace Resort will be staged, with the completion of hospitality areas by August, with the remainder of the facilities available by November.
The company warned on Feb. 1 that the opening of the resort had faced unexpected delays and costs had overrun and asked for its shares to be suspended from trading until it could provide further clarity. It said today, that the stock will remain on halt until details of the capital raising are completed.
The original cost had been estimated at $52.3 million.
Silver Heritage said the project had run over budget due to variations from the original plan for the casino and public areas, as well as land improvements. It also faced issues with costs arising from local contractors and delays in gaining approval from the Nepal Central Bank to raise the equity ceiling for the local operating unit. This affected the company’s ability to remit money into the country.
It also said there had been inefficient project management and site reporting. The company has since appointed a new team of experienced Asia executives, led by Adam Titus, who most recently worked with MGM Resorts in Macau and Okada Manila.
The Tiger Palace Resort will be Nepal’s first integrated resort once it opens. Near the border with India, it’s hoping to capitalize on pent up demand in that country, where gambling is illegal.
India will have world’s largest middle class consumption on an annual basis by 2030 at ca. US$12.8 trillion (vs. US$10 trillion in China.). Uttar Pradesh, the adjacent state to Bhairahawa, has a population of 215 million, while the whole country has a population of 1.3 billion.