Macau casino services firm Macau Legend Development Ltd says the group signed on Friday what it termed “definitive sale documents” with the government of Laos for a casino property known as Savan Vegas Hotel and Entertainment Complex (pictured).
Macau Legend announced in May it had reached an agreement with the Lao government to pay US$42 million for the right to operate Savan Vegas. 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 had since postponed the deadline to close the deal to August 31. The closing date for the initial project development agreement would be automatically further extended to September 10 if necessary, the firm said in late July. Prior to Hong Kong Stock Exchange trading hours on Monday morning, Macau Legend was yet to issue a filing indicating completion of the deal.
Last week a group going by the name European/Asian Consortium – which claims to be backed by a global casino operator – said it had submitted a higher cash offer to the Lao government to acquire the casino hotel.
That proposal included 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.
Macau Legend said in its Friday press release that a signing ceremony that day with Lao government officials was for agreements on: project development; asset purchase; flat tax; and land lease.
Macau Legend shareholders had approved the acquisition of Savan Vegas at a meeting on Thursday.
Friday’s press release quoted Souphanh Keomixay, Lao Minister of Planning and Investment, as saying the government was “confident” that Macau Legend had “the experience and track record in operating and developing high quality integrated tourist projects”.
The release also quoted David Chow Kam Fai, co-chairman and chief executive of Macau Legend, saying the firm planned to “leverage on Macau Legend’s experience and connections to help expand the almost one million annual visitors to Savannakhet”. The latter is a reference to the province where Savan Vegas is located.
Savan Vegas was formerly 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.
Last week Macau Legend announced that its net loss for the first half of 2016 had more than doubled from the prior-year period.
The firm runs two casinos in Macau: Babylon Casino at Macau Fisherman’s Wharf; and Pharaoh’s Palace Casino at the Landmark Macau, both on Macau peninsula. The casinos are operated under the casino licence of Macau gaming operator SJM Holdings Ltd.
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"If the [Macau casino] concessions are put up for bid, there will also be a lot of giant Chinese companies, some having nothing to do with gaming, which would like to take over these enormously successful casinos”
Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau