The government of Cabo Verde has accused Macau Legend Development Ltd., a Hong Kong-listed company, of not fulfilling its commitments to create a casino resort in the West African island nation. The business says it will “vigorously contest” these claims.
Macau Legend said Friday that it was “seeking legal advice in Cabo Verde” on the “appropriate course of action” to protect its rights in a statement to the Hong Kong Stock Exchange.
According to Macau Legend, the company “intends to vigorously contest these allegations to safeguard the interest of the company and its shareholders.”
Last week, the Cabo Verde government ended Macau Legend’s concession to build and run the casino resort project (seen in an artist’s rendering), according to a report from the Portuguese news agency Lusa. According to reports, authorities said the corporation had “flagrantly and repeatedly” violated its agreements to spend and adhere to the project’s deadline.
The planned location of Macau Legend’s casino resort was a 152,700 square meter (1.6 million square foot) block of land in Santiago Island’s Praia, the capital of Cabo Verde.
For what was once referred to be a EUR250 million (US$262.0 million) project, the corporation formally started building in early 2016. Luxury hotels, a casino, a conference center, and a marina were all part of the Cabo Verde plan.
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The Cabo Verde authorities informed Macau Legend on November 19 of their “decision to terminate” the agreement, citing missed deadlines and the company’s failure to “complete the investment project as agreed,” according to the document.
According to the document, the government also made the decision to “assume control of all assets previously assigned” to Macau Legend’s companies, including those that had already been built as part of the casino resort project.
As of the end of June, the business revealed that the impacted assets had a carrying value of around HKD47 million, or US$6.0 million.
It stated that “the company’s management will conduct an assessment regarding the provisions for impairment on the assets accordingly.” It did, however, note that the financial impact of the Cabo Verde government’s choice to take over management of the assets connected to the casino resort was “not expected to materially deteriorate the group’s financial position.”
In relation to the matter, Macau Legend stated that it will “make further announcement to keep its shareholders and investors informed of any material development” “when appropriate.”
Macau Legend is the owner of the Macau Fisherman’s Wharf tourism complex, which is located on the Macau peninsula near the Outer Harbour Ferry Terminal. The location has a casino called Legend Palace, which Macau Legend markets under a “services agreement” with SJM Holdings Ltd., a Macau licensee.
In the first half of 2024, Macau Legend reported a net loss of just over HKD109.9 million on sales of HKD390.4 million, up 16.5 percent year over year.
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