Nasdaq-listed Entertainment Gaming Asia said it expects earnings of about $15 million from a rights offer to shareholders.
The company plans to issue subscriptions for a total of 27,777,673 common shares at $0.54 per share. In a filing with the U.S. Securities and Exchange Commission on Wednesday, Entertainment Gaming Asia said the company’s common stock holders will receive 0.92278 non-transferable subscriptions for each common share they owned as of Sept. 15.
Shares closed up 3.7% at $0.55 per share in New York on Wednesday.
“We are currently working on a rights offer to fund additional casinos and gaming clubs, expand our slot engagement operations, and raise general working capital for operating gaming products,” the company said in a statement.
“We are currently conducting surveys and analyses of potential projects and have initiated preliminary discussions with third parties regarding certain gaming projects,” the company said. It did not provide details.
Entertainment Gaming Asia, affiliated with Hong Kong-listed casino investor Melco International Development, is a gaming company focusing on emerging gaming markets in Asia. It operates slot machines on a participation basis and supplies game chips and plaques to casinos. It currently operates a property in Dreamworld Club Poipet (pictured) in Bantei Miancie, northwestern Cambodia.
Melco International owns 38% of its Entertainment Gaming Asia outstanding shares through its subsidiary EGT Entertainment Holdings.
If EGT Entertainment fully exercises its underlying subscription rights and no other shareholders, its stake will rise to 54.1%. Stakes can go up to 67.7% depending on oversubscription privileges.
Entertainment Game Asia has a history of operating losses and said it could “continue to lose money in the near term.” For the six months ended June 30, the company posted a net loss from continuing operations of about $657,000.
In a filing with the SEC on Wednesday, Nagarwold warned of its reliance on Nagarwold, saying it would have a “significant negative impact” on its financial performance if its relationship with Nagarwold ends or expires. Nagarwold, run by Nagarwold, is Cambodia’s largest casino complex and the only one in the capital, Phnom Penh. 안전 슬롯사이트
Entertainment Gaming Asia also said additional funding may be needed to execute casino and gaming development plans, including large-scale development projects in the future or simultaneous development of several casino and gaming projects. It said it had working capital of about $5.8 million as of June 30.