Betex, which recently won a £5 million contract to co-manage the state sports lottery of the Chinese province of Guizhou, is currently raising £3 million at 22p. The company is understood to have first explored the possibility of raising a subsequent £7 million on OFEX, but has since decided AIM would be more appropriate, considering the scale of funding required.
Betex, run by Cambridge psychiatry graduate-turned financier Dr Johnny Hon, wants the money to fund its Guizhou deal and help it make further inroads into China’s £12.3 billion lottery market. Provincial lotteries are the People’s Republic’s only legal form of gambling.
This contract ensures Betex’s local subsidiary will receive a management fee of ‘not less than two per cent’ of the lottery’s turnover up to 2009. If by then this arrangement has not yielded Betex a 300 per cent return on the £1.6 million it is committed to invest in the project, the agreement will be extended until it has.
Betex, which raised £1 million at 17p before joining OFEX in May, is asking subscribers to its current £3 million funding to pay 22p a share. If it moves to AIM as planned, the next £7 million funding is set to take place in November and no price has yet been fixed.