Earlier this year the Laos government decided to sell the Savan Vegas Hotel and Entertainment Complex and shortlisted up to six proposals. One of those shortlisted companies announced in May that the government decided to cancel the tender process and dropped all six proposals. A little later during the month, Macau Legend Development Ltd, a casino enterprise in Macau announced that it had made an agreement with the government to close on the sale of the Savan Vegas property.
Macau Legend revealed that the Laos government had accepted its proposal of $42 million in exchange for the property and a fifty year monopoly in three provinces, one of which was where the Savan Vegas was located. Macau Legend stated that it expected to close the deal officially by August 31, failing which the deadline would be extended to September 10.
The Laos government has now received a counter-offer from ECAS4 International AG, a European-Asian Consortium which is backed by a global casino operator. The Consortium had partnered with some of the other firms this year to be a part of the competitive bidding process for the Savan Vegas property. The Consortium sent in a proposal offering the Laos government $60 million as part of an initial cash payment, an additional $120 million as part of a planned infrastructure expansion and $220 million in guaranteed tax revenue over a 50 year period in exchange for a 50 year monopoly in the provinces.
Werner Kubesch, the businessman heading the Consortium stated that his firm was aware the government was still negotiating with Macau Legend and hence believed that the timing of his firm’s proposal was critical to those discussions. The proposal from the Consortium was sent into the Ministry of Planning and Investment on August 10.
In a statement, Kubesch said “We are aware Macau Legend has been selected, but with deadlines already missed, we hope our counter-offer, which is substantially more beneficial to the Lao government, will be considered favourably, Our consortium is backed by one of the largest hospitality groups in the world, a well-known European based, but globally active casino operator and strong financial partners with extensive regional expertise.”
David Branson who is serving as the legal counsel to the Laos government over the sale of the Savan Vegas stated that he had no record of the Ministry of Planning and Investment ever receiving such a proposal. Branson also stated that even if a submission was made, a proposal from a non-approved firm could not be considered. He went on to say that if the Consortium used a different name and applied during the bidding process, the proposal would have been rejected since it would not have met one or more of the stipulated criteria.
Macau Legend has scheduled an extraordinary general meeting on August 18 to get approval from its shareholders to complete the acquisition of the Savan Vegas property.