The Growth Enterprises Market-listed company chaired by New World Development managing director Henry Cheng Kar-shun, son of property tycoon Cheng Yu-tung, also expects its rights issue to finance acquisitions of hotel and entertainment operations in Macau and the Philippines.

"Once the new listing is approved, we can proceed with our rights issue following shareholders approval,'' said International Entertainment executive director Simon Lo. "I'm looking at two to three months as we have already handed in our new listing submission.''

Cyber On-Air Group, renamed International Entertainment last December, announced last November 23 its proposed acquisition of hotel and entertainment operations in a gaming-related complex in Macau in 2007 and the Hyatt Hotel and Casino Manila in the capital of the Philippines.

To finance the acquisition, the group proposed to raise HK$1.229 billion through a rights issue at HK$1.5 per rights share, with each qualifying shareholder allotted four rights shares for every existing share held.

Lo said once the new listing and rights issue are completed, five to six months of net profit from the Hyatt, which has enjoyed positive cashflow and before-tax earnings, will be booked into International Entertainment.

When the acquisition was announced, the stock exchange, under GEM listing rules, treated the group as a new listing applicant given that the acquisition was a connected transaction and it exceeded 100 percent of Cyber On-Air's market capitalization.

The renamed International Entertainment is now 50.9 percent owned by Chow Tai Fook Enterprises, the Cheng family's private investment vehicle with interests spanning luxury hotels and property development worldwide, including Hong Kong and the mainland.

``The intention is to inject its gaming and entertainment businesses into the listed company [International Entertainment],'' said Lo, who is also the deputy chairman of Tai Fook Securities Group. The rest of New World's hotel businesses across the world, with no gaming and entertainment operations, will not be injected.

International Entertainment, which completed a HK$256 million placement in January to provide further funding, is to become the gaming and entertainment arm of the Cheng family, which controls the New World conglomerate and the Chow Tai Fook jewelry chain.

The Hyatt Hotel and Casino Manila, located at downtown Manila's Malate district, is the largest of the five casino hotels in the city with more than 130 game tables and 630 slot machines. The casino opened February last year and the 33-floor hotel became operational last September. The casino, operated and managed by the government-run Philippine Amusement and Gaming Corp, or PAGCOR, is the only one in the country that operates split areas for locals and foreign businesses.

International Entertainment, which owns the gaming equipment and the premises, collects 36.1 percent of net win.

According to Gerald To, director of Chow Tai Fook Hotel and Entertainment, the casinos in Metro Manila account for about 75 percent of all casino revenues in the country. The four other casino hotels in the capital, besides the Hyatt, have about 300 game tables and generate about US$250 million (HK$1.95 billion) in annual revenue.

PAGCOR chairman Efraim Genuino said casino revenue at the newly opened Hyatt is expected to hit between 2.5 billion pesos (HK$357 million) and three billion pesos this year and five billion pesos next year.

vanson.soo@singtaonewscorp.com