Macau Legend to contest Cabo Verde casino deal cancellation

Nov 25, 2024 Newsdesk Latest News, Macau, Top of the deck, World  

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Hotel and casino services business Macau Legend Development Ltd says it will “vigorously contest” statements of the Cabo Verde government, which accuse the Hong Kong-listed company of failing to meet its obligations for development of a casino resort in the West African island nation.

In an announcement to the Hong Kong Stock Exchange on Friday, Macau Legend confirmed it was “seeking legal advice in Cabo Verde” on the “appropriate course of action” to defend its interests.

The firm “intends to vigorously contest these allegations to safeguard the interest of the company and its shareholders,” Macau Legend stated.

Portuguese news agency Lusa reported last week that the Cabo Verde government had terminated Macau Legend’s concession to develop and operate the casino resort project (pictured in an artist’s rendering). Authorities reportedly claimed the company had “flagrantly and repeatedly” breached its obligations regarding the project’s timeline and investment commitments.

Macau Legend’s casino resort was to be located on a 152,700 square-metre (1.6 million sq.-foot) land plot in Praia, Cabo Verde’s capital, on Santiago Island.

The company officially began construction in early 2016, for what was described at the time as a EUR250-million (US$262.0-million currently) project. The Cabo Verde scheme was to include luxury hotels, a casino, a conference centre, and a marina.

According to Macau Legend’s filing, the Cabo Verde authorities notified the company on November 19 of their “decision to terminate” the agreement, citing unmet deadlines and the fact that the firm had “not completed the investment project as agreed”.

The government also decided to “assume control of all assets previously assigned” to Macau Legend’s subsidiaries, as well as of those already constructed in connection with the casino resort project, stated the document.

The company disclosed that the carrying value of the affected assets was approximately HKD47 million (about US$6.0 million) as of the end of June.

“The management of the company will perform assessment regarding the provisions for impairment on the assets accordingly,” it said. However, it added that the financial impact of the Cabo Verde government’s decision to assume control of the casino resort-related assets was “not expected to materially deteriorate the financial position of the group.”

Macau Legend said it would “make further announcement to keep its shareholders and investors informed of any material development” in connection with the case “when appropriate.”

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.

Macau Legend posted a net loss of just above HKD109.9 million for the first half of 2024, on revenue that rose by 16.5 percent year-on-year, to HKD390.4 million.

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