Group says it’s backed by billion-dollar interests
A group called the European/Asian Consortium tells GGRAsia it has submitted a bid to acquire the Savan Vegas resort complex in Laos, though a legal counsel to the Lao government said he has not been informed about a new proposal.
According to a news release issued by the consortium, it wants to buy the assets of Savan Vegas and a “50-year gaming concession plus 49-year extension option.”
The proposal includes an up-front cash payment of US$60 million, expansion capital of US$120 million, and US$220 million in guaranteed tax payments over the first 50-year period, said Werner Kubesch, leader of the consortium, which says it is affiliated with a global gaming operator.
Kubesch is chairman of ECAS4 International AG, which participated with other firms earlier this year to bid on the property. The consortium was not among six firms chosen to vie for the casino resort in Savannakhet, a Laos province on the border of Thailand.
Earlier this year, Macau Legend Development Ltd. made a deal to buy the complex for $42 million, but requested more time to finalize the deal, until the end of August or even into September. In the interim, the consortium got into play, saying its members include “multi-billion U.S. dollar entities” that “prefer to stay anonymous during this bidding phase because of their ‘public listed status.’
“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,” said Kubesch in the press release.
Complicating matters, the former owner of the property, Sanum Investments Ltd. and its parent company, Lao Holdings NV, are challenging the deal with Macau Legend, saying it violates a 2014 agreement with the Laotian government promising “maximum value to the benefit of all parties.”
The resort development started as a joint venture between the former owners and the Laotian government. Under that structure, Lao Holdings owned 80 percent of the complex, with the rest under government control. But in 2012, the government seized the property, claiming it owed $23 million in back taxes. The dispute was settled in June 2014 when the two companies agreed to sell their interest if Laos dropped tax-dodging and criminal bribery charges against the consortium. Now the former owners say it is not getting fair value for its ownership stake in the complex, which it says is valued at $250 million.
The deal comes with a long-term monopoly on casino operations in three Laotian provinces. The property on the border of Thailand and Vietnam includes “a full-service casino, a hotel and numerous entertainment and leisure offerings,” according to a statement from the firm. Sanum Investments and Lao Holdings are fighting the deal via lawsuits in the U.S.
The hotel at Savan Vegas has more than 470 guest rooms including 23 suites. The casino has 92 tables and 493 slot machines.
