In a surprising turn of events, Summit Ascent Holdings and its majority owner LET Group Holdings are witnessing a mass exodus of their leadership following a decision to divest the company’s stake in the Russian integrated resort Tigre de Cristal. This strategic move has prompted the immediate resignation of key directors, raising questions about the undisclosed transaction that triggered their disapproval.
Board Resignations:
Five directors, including CEO David Chua, have resigned from Summit Ascent, while three directors have stepped down from LET Group. The abrupt departure of these executives leaves Executive Director and Chairman Andrew Lo Kai Bong as the sole remaining board member for both entities. The companies have announced plans to initiate a search for replacement directors.
Transaction Details:
Although the details of the transaction remain undisclosed, a filing by Taiwanese firm Firich Investment Ltd on the Taiwan Stock Exchange provides some insight. The filing reveals plans for Oriental Regent Ltd, in which Summit Ascent holds a 77.5% stake, to sell 100% of its shares in G1 Entertainment LLC – the operating entity of Tigre de Cristal – to Dalnevostochniy Aktiv LLC, a local Russian company. The total consideration for the sale amounts to US$116 million.
Ownership Structure:
Firich Investment currently owns a 20% stake in Oriental Regent, while LET Group, formerly known as Suncity Group, owns 69.66% of Summit Ascent. The intricate web of ownership and the decision to sell the Tigre de Cristal stake signal a major shift in the strategic direction of these companies.
Potential Motivations:
The exact reasons behind the decision to sell Tigre de Cristal remain unclear. However, Summit Ascent’s previous decision to halt the development of Tigre de Cristal Phase 2 due to the conflict in Ukraine provides context. The global economic restrictions imposed on Russia in the aftermath of the conflict likely played a role in reshaping the business environment for Summit Ascent. Moreover, the company had hinted at the possibility of seeking “strategic local partners” to operate Tigre de Cristal as a response to the challenges posed by the war.
Philippines Investment:
While divesting from Tigre de Cristal, Summit Ascent has concurrently invested significantly in Suntrust Resort Holdings, a Philippines-based company developing a US$1.1 billion hotel and casino in Manila’s Entertainment City. This move aligns with Summit Ascent’s expressed desire to tap into the burgeoning gaming market in the Philippines. The company’s focus on investing in Suntrust Resort Holdings suggests a strategic shift toward emerging gaming markets in Asia.
The abrupt departure of key directors and the decision to sell the Tigre de Cristal stake mark a significant chapter in the trajectory of Summit Ascent and LET Group Holdings. The undisclosed transaction raises intrigue, and the companies are now tasked with navigating the aftermath of the leadership exodus. As the search for replacement directors begins, the industry watches closely to discern the future strategic direction of these entities and how the sale of Tigre de Cristal aligns with their broader vision.