Melco International Development Ltd (HKG: 0200) and Lawrence Ho’s Hong Kong-listed MelcoLot Ltd (HKG:8198) announced in a filing on Tuesday with the Hong Kong Stock Exchange that a deal between the two regarding a Catalonia, Spain casino project announced in October 2015 will be terminated.
Tuesday’s announcement is in keeping with a statement in their January 2016 filing that the companies’ bid to operate a casino in Spain hinged on obtaining approval of the regional government’s Master Plan for the BCN World tourism and entertainment area. The companies cited delays to the tender processes timetable and Catalonia’s current political situation as the top reasons for the cancellation of the share purchase agreement. Back in January, delays due to political uncertainties in Barcelona were already noted by MelcoLot.
The now defunct deal would have increased Melco Crown International’s 40 percent stake in MelcoLot to 65.05 percent. However, due to the transactions dependence on conditions, one of which included a Barcelona casino license being granted to a Melco International subsidy, Melco Property Development Ltd., that failed to come to fruition.
BCN World is expected to receive a license from the Catalan government to develop a hotel and casino complex. The mega entertainment complex is approximately an hour by car from Barcelona and in addition to its more than 10,000 hotel rooms, is expected to include as many as 5,000 residential units and a meeting and exhibition center.
But the uncertainty in the Catalonia government or lack there of puts that into question and MelcoLot said, “Considering the developments described above, the timetable for conclusion of the definitive Master Plan is relatively uncertain at this juncture and may potentially delay the finalization of the Master Plan and subsequently the overall timetable of the tender process,” according to Asia Gaming Brief.