Hong Kong-listed MelcoLot Ltd said on Friday it “remains interested” in the tender process to operate a casino in Barcelona, Spain, despite having terminated an agreement with partner Veremonte España SL. The partners decided to terminate the joint venture “due to the lack of basis of further cooperation,” MelcoLot said in Friday’s filing.
“A notice of withdrawal from the tender process was sent … to the Catalan government on October 8” and the joint venture “will be wound up in due course,” it added.
The companies did not provide any further details about the decision.
MelcoLot is controlled by Hong Kong-listed Melco International Development Ltd, headed by Lawrence Ho Yau Lung. Melco International is one of the two controlling shareholders of casino operator Melco Crown Entertainment Ltd – the other is Australia’s Crown Resorts Ltd.
MelcoLot confirmed in August last year that it had submitted a bid to Spanish authorities to operate a casino in an area to be developed (pictured) near Barcelona. The firm had set up a 50-50 joint venture with Veremonte; the joint venture had passed to the second phase of the tender process.
“Notwithstanding the cessation of its cooperation with Veremonte, MelcoLot remains interested in participating in the second phase of the tender process to obtain the casino authorisation and to pursue the project and has been exploring the feasibility of cooperating with other pre-qualified bidders,” the firm said.
The Catalan government is to issue a licence to develop a hotel and casino complex in BCN World, a large-scale entertainment complex planned for Barcelona. The result of the second phase of the tender is expected to be announced “no sooner than the second quarter of 2016, and could be subject to further changes depending on progress of the tender process,” said MelcoLot’s Friday filing.
The firm stated last August that it expected the second phase public tender would “commence shortly”.
Veremonte was initially leading the casino initiative of BCN World and had a financing agreement to buy 500 hectares (1,236 acres) of land in 2012. However, it missed both the first and the second deadline to do so, reported the Catalan News Agency. The investment company last week walked out on the BCN World project.
“Veremonte’s withdrawal is not a problem,” said Catalan Business minister Felip Puig, quoted by the Catalan News Agency. The Catalan government has taken leadership of the project, Mr Puig added.
According to the original plan, the BCN World project would include – among other facilities – six casinos resorts, hotels, amusement parks and shopping malls.
Companies selected in the first phase of the casino tender process included: Melco group with two bids, one in a joint venture with Veremonte and the other one alone (via Melco Property Development Ltd); U.S-based Hard Rock group also in partnership with Veremonte; and Catalan casino and hotel operator Grup Peralada.
On Friday, MelcoLot and Melco International also announced that they had entered into a share purchase agreement pursuant to which MelcoLot has conditionally agreed to purchase 99 percent of the issued share capital of Melco Property Development.
The consideration for the sale is HKD502.92 million (US$64.9 million), which shall be fully satisfied by the allotment and issue of 2.196 billion new MelcoLot shares to Melco International at HKD0.229 per share. The issuance of the consideration shares will result in the percentage of MelcoLot’s issued share capital held by Melco International and related parties increasing from approximately 40.65 percent to approximately 65.05 percent.
The deal is dependent upon certain conditions, such as Melco Property Development being granted a licence to run a casino in BCN World, the filing said.
The share deal “is the best available platform in the current circumstances for the MelcoLot group to continue participating in the tender and it represents an opportunity to expand the MelcoLot group’s business interests into the gaming and casino sector in the developing market of Spain,” the firm said in Friday’s filing.
It added: “In light of this opportunity, the MelcoLot group will benefit from the transaction with the MelcoLot group’s level of participation in the project being 99 percent if the transaction is approved, compared to 50 percent as per the previous cooperation with Veremonte.”
MelcoLot also proposed to increase its authorised share capital from HKD55 million divided into 5.5 billion shares to HKD75 million divided into 7.5 billion shares.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
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