Hong Kong-listed Melco International Development Ltd says it has started arbitration at the China International Economic and Trade Arbitration Commission against its former partner for a joint venture in mainland China. The companies were to build a non-gaming complex – including a theme park – in Zhongshan (pictured), a city near Macau, in Guangdong province.
Melco International, controlled by entrepreneur Lawrence Ho Yau Lung, is the parent of casino operator Melco Resorts & Entertainment Ltd, a licensee in Macau.
The former partner had been identified as Hong Kong-listed Agile Group Holdings Ltd, an investment holding company mainly involved in property development in mainland China.
In a Friday filing, Melco International said it had launched the arbitration in the mainland “against the Agile JV Parties, the project company … and Agile Group Holdings Ltd, in order to seek compensation”.
Melco International also confirmed that it had made an impairment of nearly HKD104.2 million (US$13.4 million) on investment costs.
“Our request for arbitration has been accepted by the China International Economic and Trade Arbitration Commission, pending hearing. As at the date of this announcement, the case has not yet been heard,” stated Melco International.
The company announced in June 2021 a plan to develop a “premium residential, entertainment and hospitality mixed-use complex” in Zhongshan. The project – which had been due to be partially completed by this year – had been slated to include “residential complexes, office areas, hotels, serviced apartments, wellness centres, shopping malls, and a theme park”.
The project was to be carried out by an entity called Zhongshan Melco Yachuang Real Estate Development Co Ltd, and the Melco group was to be responsible for developing and managing the theme park within the overall project.
But in September 2023, Melco International said it had served a notice to its joint venture partner in July 2022 to terminate a cooperation agreement and its supplemental agreements “because certain provisions in the joint venture cooperation agreement were not met by the joint venture partner”.
Subsequently, the two firms signed on June 30, 2023, a “framework agreement … for the separation plan” regarding the “joint venture termination”.
Melco International said at the time that its management expected that the group would “be able to recover the carrying amount of its investment in the joint venture”.
