Macau Legend Development Ltd, the owner of the Macau Fisherman’s Wharf precinct and operator of satellite casino Legend Palace, has reached an initial agreement to sell its Laos casino, Savan Legend, in a US$45 million deal.
The company revealed overnight that it has signed a Letter of Intent with Japanese businessman Shundo Yoshinari that would see him acquire Savan Legend pending the completion of due diligence and satisfaction of several condition precedents.
Should the deal go through, Yoshinari will acquire the entire equity interest in Macau Legend subsidiary MLD Resorts Laos Limited, which wholly owns Savan Legend.
Outlining the reasons for the sale, Macau Legend said, “Although the gaming and hotel business in Lao PDR was profit-making for the financial year of 2022, its financial performance is unstable and such business is subject to increasingly onerous restraints in Lao PDR, thereby limiting its profitability in the future.
“If the Potential Disposal materialises, the Group can reallocate more financial resources to its business operation in Macau and for overall future development. The Board considers that the entering into of the Letter of Intent and the Potential Disposal is in the interests of the Company and the Shareholders as a whole.”
Among the condition precedents listed by Macau Legend are that Savan Legend enters into a flat tax agreement with the government of Lao PDR on terms agreed by all parties, that the term of the initial gaming license shall be 99 years and that there are no adverse terms to Mr Yoshinari contained with the land tenancy certificate.
The company said it expects to be paid the full US$45 million balance within three months of signing a non-disclosure agreement.
Macau Legend, which earlier this year signed a new three-year deal with SJM to continue running the casino at Legend Palace on the Macau peninsula, recently reported a loss of HK$607.2 million for the 12 months to 31 December 2022 – impacted by the COVID-19 pandemic and related border restrictions.
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