Gaming and hotel services firm Macau Legend Development Ltd confirmed it is to dispose of its Savan Legend casino resort (pictured) in Savannakhet, Laos, for what it now says is an “initial” consideration of US$39 million, “subject to adjustment”.
The group stated in a Thursday filing to the Hong Kong Stock Exchange that it expected the gain before tax on the disposal to be “approximately HKD47 million” (US$6.0 million).
This was on the basis that the Laos unit to be disposed of, had unaudited consolidated net liabilities of approximately HKD182 million as of October 31.
The purchaser is a man identified as Shundo Yoshinari, described as “a Japanese citizen currently residing in Japan” and an independent third party.
Macau Legend had said in June it had signed a letter of intent with Mr Yoshinari to sell to him the Savan Legend casino resort for what was described at the time as a consideration of US$45.0 million.
In May 2016, Macau Legend stated it had agreed to pay US$42 million to another party for the right to operate the casino hotel in Laos.
Macau Legend said in its Thursday announcement: “Although the gaming and hotel business in Lao PDR [People’s Democratic Republic] was profit-making for the financial year of 2022, its financial performance is unstable and such business is subject to increasingly onerous restraints in Lao PDR, thereby limiting its profitability in the future.”
The Laos unit, MLD Resorts Laos Ltd, registered in the British Virgin Islands, reported a pre-tax profit of just under HKD12.03 million in 2022, compared to a loss of HKD64.03 million in 2021, a period when the business was disrupted by restrictions linked to the Covid-19 pandemic.
Macau Legend said it expected the gain on disposal to “strengthen the cash flow of the group,” allowing it to “enhance its liquidity, and… reallocate more financial resources to its business operation in Macau and for overall future development”.
Macau Legend has business linked to one casino in Macau – Legend Palace at Macau Fisherman’s Wharf – under a so-called services agreement with Macau licensee SJM Holdings Ltd.
In August, Macau Legend reported a first-half net loss of nearly HKD182.5 million, on revenue that fell by 22.7 percent year-on-year, to HKD420.2 million. The half-year loss was an improvement on the HKD485.5-million loss recorded in the first six months of 2022.
