Savan Vegas sale further delayed

Macau Legend Development Limited yesterday announced a further delay in the transaction regarding the Savan Vegas Hotel and Entertainment Complex, located in Savannakhet Province in Laos, according to a filing with the Hong Kong Stock Exchange. This comes after a June 5 announcement pushing the conclusion back to June 30. The filing states that ‘as additional time is required to finalise the information and the valuation report of the Savan Vegas Hotel and Entertainment Complex, the dispatch date of the Circular will be postponed and the Company expects to dispatch the Circular on or before 31 July 2016.’ This delay, however, does not mark a turning point or concession in the litigation between the property’s former operator – Sanum Investments – and the Lao Government, who arranged the sale through San Marco Capital Ltd. via Kelly Gass, who negotiated the sale to Macau Legend on May 13 ‘behind closed doors’, Sanum told Business Daily. ‘Bad faith’ Sanum Investments is a wholly-owned subsidiary of Lao Holdings, through which it held an 80 per cent stake in the Savan Vegas complex, while the Lao Government held a 20 per cent stake. Although Sanum Investment’s portion of the sale proceeds was to be deposited by the Lao Government into an account upon completion of the sale the company doubts that this will occur without legal measures. ‘Sadly, the Laos [Government] has acted in very bad faith, and has made very clear that they do not intend to give Sanum any of the sale proceeds. Thus, it is apparent that Sanum can only expect the Lao Government to live up to its agreements if it is forced to do so by legal means,’ the group told Business Daily, referring to the three legal actions currently progressing against the Lao Government and Kelly Gass. Sanum Investments further indicates that aside from the sales valuation of the project being 16.8 per cent of the estimated value that Sanum attributes to it, with Macau Legend offering US$42 million (MOP335.64 million) for the complex, other offers could exist. Unexpected turn ‘We are disappointed that the Government of Laos has cancelled the auction process and chosen to sell the gaming assets for less than the maximum value,’ the group notes, claiming the: ‘existence of a signed offer from another buyer to purchase Savan Vegas and the slot clubs for US$275million (MOP2.2 billion).’ The subsidiary of Lao Holdings indicates that it is open to ‘a peaceful resolution of these matters between the parties,’ while expressing doubt that this will occur and ‘because of this, and based on the Lao Government’s actions, we believe that the ongoing litigation and bilateral investment treaty tribunals will be the final adjudicators of our US$900 million (MOP7.2 billion) claim.’ The group further states: ‘How much of that money in the end will come from Laos, Macau Legend, or Ms. Gass remains to be seen.’ Sanum told Business Daily at the time of the initial sales agreement that the sale – conducted by the Laos Government via the current operator of the casino and manager of the sale, San Marco Capital Ltd. – is ‘in violation of our 2014 Settlement Agreement,’ and notes that they were not informed about the sale until ‘we were sent the Macau Legend press release by the Lao lawyers . . . at the same time they released it to the public.’ Macau Legend was unavailable for comment at the time this article went to press.