Aug 16, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck
European/Asian Consortium, an entity that claims to be backed by a global casino operator, says it has submitted an offer to acquire the casino hotel in Laos known as the Savan Vegas Hotel and Entertainment Complex (pictured). A legal counsel to the Lao government says he has no knowledge of a new proposal for the acquisition of the gaming property.
The consortium’s proposal is for the assets of Savan Vegas and also the right to a “50-year gaming concession (plus 49-year extension option), expansion plans and guaranteed minimum tax benefits for the Lao government,” the consortium said in a press release on Friday.
The proposal includes an initial cash payment of US$60 million, a planned investment for expansion of the infrastructure worth US$120 million, and US$220 million in guaranteed tax payments over the 50-year period, Werner Kubesch, the businessman leading the consortium, told GGRAsia.
Mr Kubesch is also chairman of ECAS4 International AG. The company had partnered with other firms earlier this year in order to participate in the competitive sale process of the Savan Vegas casino hotel, according to Mr Kubesch. The consortium however was not among the six firms shortlisted in March as candidates for the acquisition of the casino resort in Savannakhet – a Laos province that shares borders with Thailand.
The original plan by the Lao government to dispose of the casino hotel had involved a competitive sale process but on May 11 the parent of one of the shortlisted applicants said the government had terminated the tender process.
Macau casino services firm Macau Legend Development Ltd later in May said it had reached an agreement with the Lao government to pay US$42 million for the right to operate the Savan Vegas complex. The deal also includes the right to a 50-year monopoly on casino operations in three Lao provinces including the one where the resort is located.
Macau Legend has since postponed the deadline to close the deal to August 31. The closing date for the initial project development agreement will be automatically further extended to September 10 if necessary, the firm said in late July.
In Friday’s press release, European/Asian Consortium said it includes among its members “multi-billion U.S. dollar entities” that “prefer to stay anonymous during this ‘bidding phase’ because of their ‘public listed status’”.
“Our consortium is backed by one of the largest hospitality groups in the world, a well-known European based, but globally active casino operator and strong financial partners with extensive regional expertise,” said Mr Kubesch in the press release.
The consortium additionally said it considers its offer “‘fair value’ for the well established [Savan Vegas] casino and the 50-year concession period in an exclusive zone of three provinces”.
Mr Kubesch said the proposal was submitted to the Ministry of Planning and Investment on August 10. “We hope we can get a second chance to bid for the Savan Vegas. This is a serious offer,” Mr Kubesch told GGRAsia.
“The timing of our announcement is crucial,” he added, referring to the ongoing negotiation process between the Lao government and Macau Legend.
“We are aware Macau Legend has been selected, but with deadlines already missed, we hope our counter-offer, which is substantially more beneficial to the Lao government, will be considered favourably,” said Mr Kubesch.
Macau Legend will hold an extraordinary general meeting on Thursday to seek approval from shareholders for the acquisition of the Savan Vegas casino hotel.
The Macau-based company told GGRAsia – via its public relations agency – that it couldn’t “comment on rumours” of a new proposal for the Savan Vegas complex.
“Macau Legend has been working closely with the representatives of the Lao government, and progress has been smooth and according to plan,” the company said.
David Branson, identified as the lead legal counsel to the Lao government for the sale process of Savan Vegas, said he had no knowledge of the Ministry of Planning and Investment having received a new proposal for the casino property.
“There is no record that the Ministry of Planning and Investment has received such a submission, but any submission by a non-approved firm could never be considered,” Mr Branson told GGRAsia.
He added: “If this group [European/Asian Consortium], under some [different] name, applied [for the competitive sale process of Savan Vegas] but was not approved, it meant it failed to prove its capabilities in one or more of the required fields.”
Savan Vegas was previously controlled by Sanum Investments Ltd and its parent company, Lao Holdings NV, before the Lao government in 2012 seized the resort operation, claiming that Sanum owed US$23 million in back taxes and penalties.
The previous owners filed in May three lawsuits relating to the disposal process of the Savan Vegas complex.
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