Property lost US$11.9 million in 2015
Macau Legend Development Ltd. can take a little more time to close its $42 million acquisition of the troubled Savan Vegas Hotel and Entertainment Complex in Savannakhet, Laos. According to CalvinAyre.com, the Macau casino operator has until the end of August to wrap up the sale, and could get a further extension into September if necessary.
The former owner of the property, Sanum Investments Ltd. and its parent company, Lao Holdings NV, have challenged the deal, 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 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 50-year 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.
Macau Legend has said in a filing that Savan Vegas’s net loss for the year to December 31, 2015 was HKD92.45 million (US$11.9 million), more than three times the losses of HKD3.45 million in the prior-year period. Macau Legend blamed the “significant deterioration” of the property’s financial performance on a 5 percent depreciation in the Thai baht versus the U.S. dollar; a decline in visitation; the default of two junket operators and the loss of their VIP play volume; and a downturn in overall gaming revenue, reported CalvinAyre.com.
The hotel at Savan Vegas has more than 470 guest rooms including 23 suites. The casino has 92 tables and 493 slot machines.
