KUALA LUMPUR: MQ Technology Bhd (MQTech) will be developing a mixed resort development project, consisting of a theme park, hotel, casino and apartments, in Cambodia that carries an estimated gross development value of US$51.1 million (RM225.35 million) over the next six years.
Its wholly-owned subsidiary, Star Acres Sdn Bhd, has signed a memorandum of agreement with Cambodian Resort & Entertainment Co Ltd (CRE) for the venture, the group announced yesterday.
CRE is the owner of a piece of land measuring 5.1ha situated in Bonteay Chakkrei in Cambodia’s Prey Veng Province. The land houses a casino, hotel, staff hostel, cockfighting arena and other facilities.
MQTech executive director Robbie Hari Krishnan Tatparanandam, who is also the nephew of tycoon T Ananda Krishnan, said CRE and Star Acres would set up a 30:70 joint venture (JV).
“CRE is leasing the casino licence from its sister company, Arunbopea Layseng Keng Co Ltd, to operate the casino business on the said land,” he told a news conference yesterday, saying CRE is expected to complete the renovation work to make the project more lucrative, for a total cost of US$3 million, within three years from the signing of the JV agreement.
In the same period, MQTech will build a Jurassic Theme Park on the land provided by CRE, which will cost US$5.1 million. The renovation and theme park make up Phase 1 of the development.
“The JV agreement will be signed once the due diligence process is completed, which will take approximately three to six months from now,” said Robbie.
Phase 2 of the development involves the construction of two blocks of serviced apartments within six years after the signing of the JV agreement. MQTech has the first right of refusal to finance the building of the 500 units of apartments.
Hong Kong-listed Naga Corp Ltd currently has a 41-year casino operation monopoly within a 200km radius of Phnom Penh until 2035.
When asked if Naga Corp would be involved in the venture, Robbie said the two companies are in discussions. “[Our project] is on the outskirts … but we are talking to them,” he said.
The Phnom Penh Post reported on Monday that the deal could be tied to Cambodian gaming firm VW Win Holdings Plc, a subsidiary of Malaysian conglomerate Century Dynasty that conducts CamLoto, which is the number forecast business in Cambodia.
But the newspaper went on to quote Century Dynasty chairman Datuk Seri Stanley Goh Teik Keng as saying the company has no involvement in the project.
MQTech, which is listed on the ACE market, last month raised RM27.53 million via a rights issue of shares with warrants. Of this, RM15.9 million will be utilised to fund the group’s 51% stake in a JV to develop the Malacca Explorer Resort — Dive Park Zone theme park in Klebang, Melaka.
On how loss-making MQTech will be funding these projects, executive director in charge of corporate restructuring Edwin Silvester Das said it will be through different sources of funding. But he declined to go into the specifics.
“We are now [focusing] on the turnaround of MQTech. We are targeting a 30% increase in terms of revenue for the financial year ending Dec 31, 2017 (FY17), contributed by better marketing and increasing productivity, and we expect to be profitable by FY17,” he said.
For the nine months ended Sept 30, 2016, MQTech reported a bigger net loss of RM2.55 million, compared with RM881,000 a year ago. Revenue fell slightly to RM12.54 million from RM12.62 million.