GGRAsia – Cape Verde govt says in talks to revert Macau Legend licence

Cape Verde govt says in talks to revert Macau Legend licence

May 13, 2024 Newsdesk Latest News, Top of the deck, World

The government in the island nation of Cape Verde says it is in talks with Hong Kong-listed casino services firm Macau Legend Development Ltd to revert the latter’s concession to develop and operate a casino resort in the West African country.

Cape Verde’s vice prime minister and minister of finance and business promotion, Olavo Correia, told local broadcaster RTC over the weekend, that both parties are in negotiations on the matter.

He added that the government’s goal was to reach, within two months. “a friendly agreement to revoke the concession contract” with Macau Legend.

“Either we reach an amicable understanding – but this cannot be negotiated indefinitely, there is a reasonable period of time for this to happen – or, if it is not possible [to handle the matter] in a friendly way, unfortunately, we will have to resort to other ways as set under the law, since [Macau Legend] is clearly non-compliant” with its contractual obligations, stated Mr Correia.

Macau Legend announced in 2015 it had signed several agreements with the Cape Verde government to develop a casino resort in the country’s capital. The firm said at the time it planned to invest about EUR250 million (US$269.6 million at current exchange rates) in the casino scheme (pictured in an artist’s rendering).

The firm officially began construction of the casino resort in 2016, but the project has since been plagued by delays. According to local media reports, construction work has long been paused. Macau Legend made no reference to the project’s status in its latest annual report, released in April.

In his comments to RTC, Mr Correia said the Cape Verde government was aiming to find a new set of investors for the casino resort project

“There are already several [interested] parties,” he said. “We will select that best partner, one that gives us financial, management and project execution guarantees, so that there are no further delays [in the project].”

Separately, Macau Legend has been trying to dispose of its Laos casino resort business. Sale of Savan Legend Resorts had been announced in June 2023, but the deal has since suffered a number of delays.

In a December filing, Macau Legend said that the entire equity interest in Savan Legend was to be sold at what it called an “initial consideration” of US$39 million. The group said at the time that it expected the gain before tax on the disposal to be approximately HKD47 million (US$6.0 million).

The disposal, if realised, is expected to help strengthen Macau Legend’s cash flow and its financial resources for Macau operations, the firm has said in previous filings.

Macau Legend had a net loss for 2023 of HKD4.9 million, according to its annual results filed on March 28.

Macau Legend 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 so-called services agreement with Macau licensee SJM Holdings Ltd.