Hong Kong-listed real estate developer China New Town Development Co Ltd says it has signed a memorandum of understanding with U.S.-based casino operator MGM Resorts International to jointly establish a fund to invest in non-gaming tourism projects in China.
The fund will focus on “non-gaming tourism, leisure and cultural development” projects, China New Town Development said in a filing on Monday.
China New Town Development is a real estate developer in mainland China. The company describes itself as a unit of China Development Bank Capital Corp Ltd.
“The fund’s mandate is to invest in non-gaming tourism projects, mainly within China, while also seeking investment opportunities in strategically core cities in countries along the ‘One Belt, One Road’ [initiative],” the firm sai in Monday’s filing. The “One Belt, One Road” concept is known as an initiative promoted by China’s President Xi Jinping that is designed to link infrastructure and investment along the country’s traditional East-West trade routes.
“These [non-gaming tourism] projects will benefit from being branded or managed under MGM, Diaoyutai MGM or their other affiliates,” China New Town Development added.
The “Diaoyutai MGM” was a reference to Diaoyutai MGM Hospitality Management Company Ltd, a joint venture between MGM Resorts and Diaoyutai State Guesthouse. MGM Resorts is also the parent of Macau casino operator MGM China Holdings Ltd, with a 56-percent stake.
China New Town Development said it would inject HKD200 million (US$25.6 million) into the fund, while MGM Resorts would contribute with HKD100 million. The two parties intend to incorporate the fund by way of limited partnership in the Cayman Islands, according to the filing.
The filing said that after the establishment of the fund, the two parties agreed to contribute an initial 10 percent of their respective committed capital “as soon as possible”. The rest will be gradually contributed “subject to the actual investment progress of projects,” the filing reads.
“The cooperation … will combine the strategic resources of the company, namely its business network and land resources, with the industrial know-how of MGM [Resorts], to promote investment and operation of tourism projects in China,” China New Town Development said.
It added: “The parties intend to obtain land resources with a reasonable cost in high-quality urban locations, launch projects under the MGM brands and management expertise, and build large-scale tourism resort projects consistent with domestic consumption trends.”
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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
Chairman of the Wynn Resorts board of directors