GGRAsia – China Star land deal awaiting agreement

China Star land deal awaiting agreement

Jan 28, 2015 Newsdesk Latest News, Macau, Top of the deck

A deal worth HKD2.23 billion (US$288 million) whereby China Star Entertainment Ltd would dispose of rights over several prime Macau land plots next to its Lan Kwai Fong hotel property (pictured) in Macau is still awaiting sign off by several parties. That is according to a filing by China Star made to the Hong Kong Stock Exchange on Tuesday.

The deadline for the agreement has been extended from January 27 to February 28, according to the filing.

The firm on November 21 said it had entered into a deal regarding the disposal of property leasehold rights of some undeveloped land plots next to the Lan Kwai Fong hotel.

There is currently a casino licensed by Macau casino concessionaire SJM Holdings Ltd inside the hotel building. In November, China Star announced it was also negotiating the potential sale of the hotel, for a consideration of HKD3.75 billion, but no further announcement has been made so far.

The property leasehold rights agreement for the undeveloped land plots needs to be executed by, respectively: Sociedade de Turismo e Diversões de Macau SA (STDM) the parent firm of SJM Holdings; the target firm in the deal (an offshore investment holding company); and China Star.

The plots of land were granted to STDM by the Macau government before the city’s return to Chinese administration in 1999. A subsidiary of China Star in 2010 paid HKD550 million to acquire the property leasehold rights for those plots. STDM however is still the registered owner of the properties.

The purchaser in the deal was named in the November 21 filing by China Star as Bestmix Holdings Ltd, a company 51-percent owned by Hong Kong-listed CSI Properties Ltd – a property investor and developer focused on the Hong Kong and Shanghai markets.

In December, China Star said it would use the net proceeds from a share subscription approved in September for “film production and general working capital” as “no suitable investment has been identified” in the Macau gaming market. The firm had said previously that the net proceeds of the share subscription, amounting to HKD134.30 million, would be used for investment in gaming-related businesses in Macau.