Macau Legend Development Ltd struck a bargain with the Lao government recently giving them a 50 year monopoly in Bolikhamsay, Khammouane and Savannakhet provinces, which includes the location of the embattled Savan Vegas Hotel and Entertainment Complex. According to the firm the price was US$42 million (approximately HK$326 million).
After seizing the Savan Vegas property and disposing of or attempting to dispose of the assets of Sanum Investments Limited, the government offered a tender on the property in which 6 companies were selected to compete. Bids were to be tendered by May 10, 2016. However in a stock exchange filing the next day, one of the companies announced that the government had canceled the tender process. No explanation or official announcement has been forthcoming from the Lao government.
In a press release Friday April 13, Macau Legend said, “In addition to the existing facilities, the parties are also discussing the development by Macau Legend of a land parcel in the Savan Seno Special Economic Zone of the Savannakhet Province of the Lao PDR which is adjacent to the existing Savan Vegas Hotel and Entertainment Complex. The planned development would include two golf courses, a 600 room hotel, villas, casino, exhibition hall and spa, pool facilities, staff quarters and training facilities.
The firm also noted that if all terms are met in the first 50 year period, the project development agreement, “may be extended for an additional period up to another 49 years.”
Mr. David Chow, Co-Chairman, Executive Director and Chief Executive Officer of Macau Legend, said, “In addition to the commitment to the successful completion of the projects in Macau, we have been looking to invest in and develop integrated resort projects outside of Macau. We sincerely thank the Government of the Lao PDR for their support and trust in Macau Legend to help turn the Savan Vegas project into a regional entertainment hub in Southeast Asia.”
The deal is expected to close before the end of July, 2016.
In late March Macau Legend announced that they would sell Pharaoh’s Palace Casino in Macau to a stakeholder.
In other news related to Savan Vegas, on May 6, Lao Holdings N.V., the parent company of Sanum Investments Limited, announced that it had filed three legal actions in relation to a 2014 settlement with the Lao government. The government seized the Savan Vegas property in 2012 for an alleged millions in back taxes, which Lao Holdings contends were levied arbitrarily and at exorbitant rates. One section of the complaint states that, “the Lao Government’s retroactive assessment of over US $70 million in taxes; its groundless pursuit of criminal allegations against Lao Holdings, Sanum, and affiliated individuals; its actions that will lead to a low-ball sale of Savan Vegas; and its stated intention to ensure that Lao Holdings does not receive any of the proceeds from the Savan Vegas sale.”
Lao Holdings states that if the material breach suit is successful, “the ICSID Arbitration that Lao Holdings filed against Laos in 2012, which was intended to be resolved by the 2014 settlement agreement, will be revived. The amount of damages claims that will be at issue if the 2012 ICSID arbitration is revived is approximately US $890 million.”