As reported by: Bloomberg News
Hong Kong tycoon Lui Che-woo plans to turn his K. Wah Construction Materials Ltd. into the city's first publicly traded casino operator by selling a Macau venture to the company for HK$18.4 billion ($2.4 billion).

K. Wah plans to pay shareholders led by the Lui family new shares and debt securities for Galaxy Casino SA, which has one of three casino licenses in Macau, the world's biggest gaming hub after Las Vegas. K. Wah said in a statement it will change its name to Galaxy Entertainment Group Ltd. and may sell shares to the public to fund a HK$5.7 billion expansion.

The deal allows Lui to take his casino business public without an initial share sale, boosting his ability to compete in the southern Chinese city with Macau's Stanley Ho, Las Vegas Sands Corp. and Wynn Resorts Ltd. Gaming revenue in Macau, the only place in China where casino gambling is legal, rose 44 percent to $5 billion last year, driven by visitors from China.

"In Macau, it's a fight for position and a fight for capital," said Jonathan Galaviz, a partner at Las Vegas-based Galaviz Ong & Co. and adviser to U.S. gambling companies seeking to enter Asia. "A public listing adds a certain amount of corporate scrutiny and regulatory scrutiny and makes it easier to attract capital."

The ability of the new company to raise funds by selling new shares may be boosted by a rally in Macau-linked stocks. K. Wah's shares soared 14.7 percent to HK$7.75 at 2:48 p.m. in Hong Kong, bringing this year's gain to 67.5 percent. Shares of Melco International Development Ltd., a Hong Kong-listed company controlled by Ho's family, have risen 4 percent this year.
Article By: Bloomberg News