Macau Legend Development Ltd., a Hong Kong-listed hotel and casino services business, has announced its intention to “vigorously contest” the decision by the government of Cape Verde to terminate its concession to develop and operate a casino resort in the West African island nation.
According to GGRASIA, in a filing to the Hong Kong Stock Exchange Friday, Macau Legend confirmed it was “seeking legal advice in Cape Verde” on the “appropriate course of action” to defend its interests in the matter.
The company stated it “intends to vigorously contest these allegations to safeguard the interest of the company and its shareholders.”
This comes after the Cape Verdean government notified Macau Legend Nov. 19 of its decision to terminate the agreement, citing unmet deadlines and the firm’s failure to complete the investment project as agreed.
The Cape Verde government last week announced in the nation’s Official Bulletin that it was canceling the Establishment Convention and its Addendum entered into with Macau Legend subsidiaries MLD Cabo Verde Resorts SA and MLD Cabo Verde Entretenimento SA. Authorities cited the company’s alleged “flagrant and repeated” violations of its obligations regarding the project’s timeline and investment commitments.
According to reports from Lusa, the Cape Verdean authorities accused Macau Legend of “flagrantly and repeatedly” breaching its obligations for the EUR250 million project, which was slated to include luxury hotels, a casino, a conference center, and a marina on a 152,700-square-meter site in the capital city of Praia.
The government stated it had acted “in good faith” previously, by giving Macau Legend numerous opportunities to resume work, negotiate a sale, or transfer its position to another interested party, but the company failed to do so.
In addition, the Cape Verdean government announced two weeks ago that it will analyze alternatives to the Macau Legend tourism and gaming venture, which was meant to transform the capital city of Praia.
An eight-story building has been completed but remains empty, while a bridge connecting to the Santa Maria Islet has also been constructed in the fenced-off waterfront area. The government cited Macau Legend’s non-compliance as the reason for terminating the contracts.
Macau Legend, which operates the Macau Fisherman’s Wharf precinct and the Legend Palace casino in Macau, reported a net loss of just over HKD109.9 million for the first half of 2024, despite a 16.5% year-on-year increase in revenue to HKD390.4 million. The company acknowledged that it would need to perform an assessment regarding the provisions for impairment on the assets, but added that the financial impact of the Cape Verdean government’s decision is “not expected to materially deteriorate the financial position of the group.”
Macau Legend said it would “make further announcements to keep its shareholders and investors informed of any material development” in connection with the Cape Verde case “when appropriate.” Victoria Chan
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