Taiwan's Xiangxiang Games Inc., which trades as XSGames, is a "cornerstone investor" in the Hong Kong initial public offering (IPO) of Palasino Holdings Ltd, a company interested in European casino venues and hotels, it said in a Monday night filing.
Palasino Holdings said XSGames, a provider of online gaming content and on-the-ground slot machines, had subscribed 18.8% of Palasino's IPO shares, or just over 26.92 million shares. The percentage was calculated based on the over-allocation option not exercised.
XSGames said in its own press release it considered the new investment, which holds a 3.4% stake in Palacino Holdings, as a springboard to become "the first Taiwanese company to introduce slot machine products to Europe."
In the first day of trading on the Hong Kong exchange on Tuesday, shares of listed Palacino Holdings fell back to 6.5% gain by lunchtime after gaining about 24% from its initial offering price of HK$2.60 ($0.332).
Palasino Holdings, a spin-off of Hong Kong-listed Far East Consortium International, is an investor in the Queensland Brisbane initiative, which includes a casino resort in Brisbane, Queensland Australia, promoted by Star Entertainment Group Ltd.
Since the Palasino company's IPO, the majority shareholder has been 73.21%, Amply Bonus, a wholly owned subsidiary of the Far East Consortium, assuming that the overallocation option is not exercised.
Palacino Holdings said its IPO had gross profit of HK$222.9 million, less than the previously mentioned figure. The Palacino company netted HK$194.1 million after spending HK$28.8 million. XSGames' stake is worth about HK$70 million.
Palacino Holdings offered nearly 142.86 million shares globally, comprising 85.71 million new shares and 57.14 million existing shares. The number of shares in the Hong Kong offering accounted for 30% of the exercise, according to Monday's filing.
Palasino Holdings operates three land casinos in the Czech Republic, one of which is located within an integrated resort. According to corporate information, the athletes at the venue are mostly from neighboring Austria and Germany. The company also operates three hotels in Germany and one in Austria.
Palacino Holdings also has a license issued by the Malta Gaming Authority, which allows the Malta Gaming Authority to operate an online gaming business in its jurisdiction,
The company said in its prospectus that most of the IPO's net proceeds would go to "maintaining and further consolidating Palacino's market position in the gaming industry within the Czech Republic through asset rehabilitation" and "expanding the company's gaming business in Czech, Central Europe or other markets through business or asset acquisition and/or new gaming license bids."
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