Independent corporate finance and investment advisory firm, specialising in smaller quoted and larger unquoted companies
27 November 2006
Source: Financial Times
By: David Blackwell
Gamex, a company with ambitions to take a slice of the Chinese gambling market, is planning to come to Aim next year.
Danny Wu, chief executive, and Ai Win, chief operating officer, will be arriving in the City tomorrow to join the UK executives on the first round of talks in a bid to raise up to £17m of pre-IPO finance.
Gamex plans to use the funds to take a significant minority stake in ChinaLotto, one of the largest lottery estates in China, with more than 7,000 terminals reaching 280m people. It will also help ChinaLotto to build a scratchcard business.
In addition to its deal with ChinaLotto, the company is poised to launch a service in Tianjin enabling Chinese lottery players to buy tickets through their mobile phones, and to take part in trials that could lead to the launch of bingo across the country.
Gamex was founded a year ago by Chris Fraser, the chairman, who has extensive experience of China. He worked for the Hong Kong government from 1961 to 1976 and returned to Hong Kong as the Asia Pacific director of the UK government’s Invest In Britain bureau from 1995 to 1998.
Mr Fraser said the company would be a doorway for investors to access the Chinese passion for gambling. ChinaLotto was founded 18 years ago, and has an annual turnover of more than £5m.
In addition to buying a share of an existing business, the company had licences and agreements to develop the mobile phone side and to take part in a trial bingo project. Mr Fraser said the Chinese government was keen to encourage the development of new games as part of a drive to clamp down on illegal gambling, which led to billions of dollars going abroad.
“This is not a greenfield start-up,” said Mr Fraser. “We have an established business as part of our portfolio, and we have the partners and connections. It is not easy to get into the Chinese market as an international operator.”
If the company is floated on Aim some time next year, it will find a rival in Betex, which earlier this year moved from Ofex to Aim at 40p a share. The shares quickly doubled but have since fallen back to close at 35¾p.
Copyright: The Financial Times Limited 2006
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