March 18, 2015

BLOOM acquires Korean Casino and Silmi Island

In a disclosure to the Exchange yesterday, Bloomberry Resorts Corp announced that its subsidiary Solaire Korea Co Ltd has signed an agreement to acquire up to 92%of Golden&Luxury Co. Ltd (G&L) subject to performance of several conditions. G&L owns and operates T.H.E. Hotel & Vegas Casino in Jeju Island South Korea.

In a separate disclosure, the company also announced that its Korean unit signed a real estate agreement for the purchase of Silmi Island which has an area of 20.96 hectares and is adjacent to the 12.2 hectares property that it earlier acquired in Muui Island subject to acquisition agreements.

Silmi Island is also within the coverage of the Incheon Free Economic Zone and is intended to be developed into a leisure and tourism complex with entertainment facilities and mixed use developments.

Our take: While the full details of the acquisitions have yet to be disclosed BLOOM, we note that the performance of Korean casinos have recently taken a hit amid China’s crackdown on global gambling and tighter scrutiny on mainland Chinese travelling to Jeju island South Korea.

The recent acquisitions should not affect BLOOM’s numbers in the near term but this should provide BLOOM with some advantages in the long run if Korea decides to allow foreign casinos to admit local Koreans as patrons. This should create additional market for foreign-owned casinos in Korea and reduce their dependence on Chinese gamblers. - WealthSec