China Star in talks to sell Lan Kwai Fong hotel in Macau
Casino services firm China Star Entertainment Ltd, which suspended trading of its stock on the Hong Kong Stock Exchange on November 3, is planning to sell the Lan Kwai Fong (pictured) hotel property on the Macau peninsula. There is currently a casino licensed by Macau gaming concessionaire SJM Holdings Ltd inside the hotel building, but a filing on Thursday from China Star didn’t mention what would happen to that operation.
“The company is in the late stage of negotiations with an independent third party relating to a possible disposal of Hotel Lan Kwai Fong in Macau,” China Star said.
“The terms of the hotel disposal are subject to final negotiations. As at the date of this announcement, no agreement has been entered into by the company,” added the firm.
China Star said in August it wanted to focus its operations on gaming in Macau. The Hong Kong-listed firm disposed of several non-gaming subsidiaries in the half year to June 30.
In September, shareholders of China Star approved the issue of new shares to raise cash to invest in the gaming-related businesses.
The company has also signed a binding letter of intent, dated October 31, 2014, to dispose of the rights over four plots of land on the Macau peninsula, adjacent to the Lan Kwai Fong hotel property. In Thursday’s filing, the firm said it is still preparing the announcement related to the deal.
A subsidiary of China Star paid HKD550 million (US$70.9 million) for the four plots in 2010. The vendor was Sociedade de Turismo e Diversões de Macau (STDM) SA, the company founded by Stanley Ho Hung Sun.
At the time of the deal, Mr Ho was identified as chairman and director of Lan Kwai Fong (Macau) Ltd, a 50 percent owned subsidiary of China Star.
Under the 25-year lease contract, three of the lots were to be developed with the construction of a building each with sixteen floors, for residence, commerce and parking. The fourth plot, the one closest to Lan Kwai Fong, should also have a 16-storey high building, for office, commerce and parking, according to a January 2011 filing.
The latter plot of land was leased for a term of 25 years, which ends on December 25, 2014. The lease of the other three is valid until December 20, 2019, China Star said when it acquired the rights to the land from STDM.
The lots are still to be developed according to their lease agreements.
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