Melco consortium ties in with Wafer

Melco International Development Ltd (Melco)<200>, a leisure and gambling conglomerate in Macau, made an announcement on Monday that a consortium set up by a subsidiary, plans to inject its Asian lottery-related business into Wafer Systems<8198>, a leader in network solution and service provider in Hong Kong and China Mainland.

The consortium comprises of Melco's wholly owned subsidiary Melco Lottventures Holdings, Taiwan-listed Firich Enterprise Co., Ltd (FEC)<8076> and Singapore-listed LottVision Ltd.

According to Lawrence Ho Yau-lung, chairman and chief executive of Melco, the company trusts that Wafer will emerge as one of the leading lottery-related service providers in China, considering the combined strengths of the above consortium.

A company named Power Way Group will be set up for a special purpose, in which, Melco, Firich and LottVision will be holding 54.8%, 26.9% and 18.3% stakes respectively. Following the deal, Wafer will indirectly hold 60% of Wu Sheng, a subsidiary of Firich, which is mainly engaged in the manufacturing and sales of lottery vending terminals in China. In addition, Wafer will be owning 80% of PAL Development, a subsidiary of Melco, an operator in lottery-related businesses and ventures in Asia.

It is estimated that HK$ 72 million worth of new Wafer shares will be issued, with HK$606.8 million of bonds convertible into HK$ 713.9 million new Wafer shares.