Gaming operator Macau Legend Development (MLD) has announced its intention to contest the Cape Verdean government’s decision to reclaim the unfinished hotel-casino project in Praia.
On 18 November, the Cape Verdean government formalised the repossession of the incomplete hotel-casino and associated developments on Santa Maria islet and the Gamboa waterfront in the capital.
“Given that MLD flagrantly and repeatedly violated its obligations, the State of Cape Verde has no choice but to terminate the contracts,” declared a resolution from the Council of Ministers.
Macau Legend informed the Hong Kong Stock Exchange that it “intends to vigorously contest these allegations to safeguard the interests of the company and its shareholders.”
“The company is actively seeking legal advice in Cape Verde regarding the appropriate course of action,” the operator added in a statement released on Friday night.
In 2015, businessman David Chow signed an agreement for a €250 million investment. Following revisions, the project’s first phase was scheduled for completion by 2021.
In recent years, the 160,000-square-metre site has remained largely dormant, guarded only at its gates. The property includes Santa Maria islet, partially excavated, and a short paved bridge leading to an empty eight-storey building fenced off with barricades.
The government stated that Macau Legend had been given “every opportunity to resume the works or negotiate the sale of shares or transfer its contractual position to a potential party interested in continuing the project,” but no viable alternatives were presented.
Authorities also accused the company of violating gaming regulations by “transferring, without the Cape Verdean government’s authorisation, ownership of more than 20 per cent of its share capital.”
The government further highlighted “convictions by courts in the Macau Special Administrative Region of shareholders, administrators, and other parties with rights and responsibilities in MLD,” along with the “economic and financial situation of the parent company.”
Despite signs of recovery in Macau’s gaming sector, Macau Legend reported a loss of HK$109.9 million (€13.5 million) in the first half of this year.
The company stated that it does not expect the Cape Verdean government’s decision to “materially deteriorate the group’s financial position.”
It disclosed that its Cape Verde project was valued at HK$47 million (€5.76 million) as of late June.
About a year ago, in an interview with Hong Kong’s TVB channel, Macau Legend’s chairman and CEO, Li Chu Kwan, revealed that the group intended to wind down its projects in Cape Verde and Cambodia by 2025.
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