Offering advice and technical services
A unit of Melco International Development will serve as consultant to a casino that is “to be developed” on Jeju Island in South Korea. According to GGRAsia, the name of the casino project wasn’t included in a filing by Melco International to the Hong Kong Stock Exchange. The firm on the receiving end was identified as Silkroad Korea Development Ltd., which reportedly will build a casino over three years on the holiday island. The Melco unit has been dubbed Melco Gaming Assets Management (Korea) Ltd.
The filing said New Silkroad Korea is a wholly-owned subsidiary of Hong Kong-listed New Silkroad Culturaltainment Ltd. under Chairman Su Bo.
In its filing, Melco announced it will provide New Silkroad Korea “with consultancy, advisory and technical services, including with regard to the building, equipping and fitting-out of the casino and the preparation and organization of the casino’s marketing activities. The services also include the provision of intellectual property and know-how.”
Melco’s fee for “basic technical services” US$5 million, or 22,605,000 shares in the firm. As a result, Melco will acquire a stake of around 1.0 percent in New Silkroad Culturaltainment.
“The agreement between Melco Gaming and New Silkroad Korea is conditional on Melco Gaming completing its due diligence investigation in relation to the financial, legal and business affairs of New Silkroad Korea and the owner of the casino, to the reasonable satisfaction of Melco Gaming,” said Melco International’s filing.
In a statement, Clarence Chung Yuk Man, executive director of Melco International, touted his firm’s “proven track record of creating and operating world-class integrated entertainment and leisure resorts across different geographies such as Macau, Manila and Russia.” He said Melco can bring “professional concepts and practices to New Silkroad’s project and enhance Jeju’s tourism appeal on a global stage.”
In the same statement, Su said, “The strategic partnership with Melco will enable New Silkroad to benefit from the extensive experience and expertise of the respected international gaming brand, through its participation in the design and early-stage development of our mega-casino.”
In an April filing, New Silkroad said it had agreed to acquire 13 percent of Development Golden Beach Co. Ltd., a firm licensed to run a casino on Jeju, paying KRW9.88 billion (US$8.47 million) for the stake. The filing said the transaction would take New Silkroad Culturaltainment’s total stake in the target firm to 72 percent, reported GGRAsia.
Development Golden Beach is a South Korean firm that operates a casino business at Jeju KAL Hotel. New Silkroad Culturaltainment is now “looking to expand the casino business with the purpose to capture the growing gaming market and booming tourism industry on Jeju Island.”
Landing International is also busy on a casino resort on Jeju, which is located in the Korean Strait. The $1.8 billion resort, a joint project between Landing and its partner Genting Singapore, broke ground in February. It will reportedly be modeled after Genting Singapore’s Resorts World Sentosa in Singapore, and will open in stages from 2017 to 2019.
