Gaming firm Delta Corp to exit real estate business to stay debt-free

Mumbai: Delta Corp Ltd, the Mumbai-based gaming and hospitality company, plans to set up a casino resort in Sri Lanka and sell non-core assets, including real estate, to become a debt-free company over the next 18 months.

Delta Corp has acquired an 11 acre prime parcel of land in the island-nation, which has been marked for development as a casino resort, chairman Jaydev Mody said.

“With the end of the 25-year civil war in May of 2009, tourism in Sri Lanka has experienced growth over the past two years with tourist arrivals increasing every month on a year-on-year basis. Sri Lanka is more convenient gaming destination for south Indian states on account of its proximity,” Mody said.

He said his company is also looking at Sikkim and Nepal for opening casino resorts.

Delta Corp, the largest operator in the gaming market in India and the only listed operator, ruled out any possibility of raising funds.

Delta’s promoters, Mody and family, hold 41.72% of the company’s shares. Indian investor Rakesh Jhunjhunwala holds 6.8% and private equity firm ICICI Venture holds a 5.99% stake.

“We are not in need of funds at this point of time. On the contrary, our idea is to become a net debt-free company in next 18 months. We want to bring our debt levels to zero by selling and liquidating our non-core assets including real estate,” Mody said.

The company, which has a debt of ₹ 300 crore, has already exited the real estate business in Kenya.

“We are planning to raise around ₹ 200 crore by selling real estate assets. With an internal accrual of ₹ 100 crore, we would be able to retire our entire debt. In the next three years, we would be exiting real estate business completely and we would be purely a gaming and hospitality business,” Mody said.

Delta Corp had started as a textile and real estate consultancy company in 1990 and exited textile business in 2008. It runs three offshore casinos in India.

“Gambling is in the DNA of Indians. Slowing economy has not affected the business. We are trying to take the premium gaming to masses with the planned expansion,” Mody said.