Hotel and casino services firm Macau Legend Development Ltd has accused the government of Cabo Verde of committing an “offensive act” by unilaterally terminating a series of agreements with the firm for the development of a casino resort in Praia, the capital of the West African island nation.
The termination was “enacted without Macau Legend having been previously notified” that such an administrative procedure was ongoing, the company stated in a release published in the local newspaper Expresso das Ilhas and quoted by the Portuguese news agency Lusa.
In the release, Macau Legend reaffirmed its intention to pursue legal action, stating: “Macau Legend will immediately use the legal means at its disposal to defend its rights, and trusts that, until the matters relating to these agreements are resolved, the State of Cabo Verde will no longer carry out any act offensive to [Macau Legend’s] rights as an investor.”
The firm claimed in the release that it had kept the government of Cabo Verde “informed of negotiations with other potential investors” eventually interested in supporting the project. Macau Legend also asserted it complied with its financial obligations, including the timely payment of gaming concession-related fees.
The Cabo Verde government terminated in November Macau Legend’s concession to develop and operate the casino resort project. Authorities reportedly claimed that the company had “flagrantly and repeatedly” breached its obligations regarding the project’s timeline and investment commitments.
In an earlier response to the decision, Macau Legend had stated in a filing to the Hong Kong Stock Exchange – where it is listed – that the group would “vigorously contest” the Cabo Verde government’s move.
As part of its decision, the government of Cabo Verde also decided to “assume control of all assets previously assigned” to Macau Legend’s subsidiaries, as well as of those already constructed in connection with the casino resort project, stated Macau Legend’s November filing.
The company disclosed at the time that the carrying value of the affected assets was approximately HKD47 million (about US$6.0 million) as of the end of June.
Macau Legend’s casino resort (pictured in a rendering) was to be located on a 152,700-square-metre (1.6-million-square-foot) plot of land in Praia, on Santiago Island.
Construction officially began in early 2016 on what was described at the time as a EUR250-million (US$262 million) project. The Cabo Verde scheme was set to include luxury hotels, a casino, a conference centre, and a marina.
Macau Legend also owns a tourism complex called Macau Fisherman’s Wharf, a waterfront area close to the Outer Harbour Ferry Terminal on Macau peninsula. The venue features a casino called Legend Palace, promoted by Macau Legend under a services agreement with Macau licensee SJM Holdings Ltd.
The company posted a net loss of just over HKD109.9 million for the first half of 2024, despite a 16.5 per cent year-on-year increase in revenue to HKD390.4 million.
