Macau Legend’s plans for a 250 million euro ($271.2 million) casino in the Cape Verde city of Praia could be in jeopardy, after the nation has threatened to take legal action against the company for not following through with its construction and investment deadlines.
A report by TDM Canal Macau notes that the government issued a request for both a guarantee of financial capacity to continue and conclude the hotel-casino project as well as a timeline for its execution.
The project was commenced in 2016 and had been expected to be concluded by February of 2021, with the government only issuing the note to Macau Legend in September of last year.
The development was initially slated to include a hotel and casino, a marina and nautical facilities, an international convention center, residential area and parking lot, but currently only an eight story structure and a bridge linking the island where the project is located to the peninsula have been constructed.
In April of 2019 the two parties agreed on a phased development of the property, with investment of 90 million euros ($97.63 million), encompassing the bridge, casino, hotel with 250 rooms and a large pool, restaurants, bars and commercial establishments and various supporting infrastructure.
The timeline for the completion was set by the agreement as for 22 months, which terminated in February of 2021, with the government waiting until September of the following year to issue its request for a construction timeline and proof of financial stability of the company.
The subsidiaries set up to operate the hotel and gaming business of the Praia development are 100 percent owned by Macau Legend.
In its most recently published financial results, the company recorded a loss of HK$485.5 million in 1H22.
As reported by TDM Canal Macau, Macau Legend requested a three-month period in which to respond to the government’s requests, citing the pandemic and conflict in Ukraine as reasons, with the company being granted until the end of 2022 to respond to the requests.
No response was received by the deadline, prompting a January 18th letter, giving Macau Legend seven days to respond ‘or be subject to the activation of legal and conventional mechanism defined by the judicial instruments which apply to relations between Cape Verde and the promoter (Macau Legend)’.
Nine days later, Macau Legend responded, justifying its delay by the Chinese New Year holidays and promising a prompt response.
Despite the ongoing difficulty, the Cape Verdean government notes that it is ‘firm in its intention […] to dialogue with and help investors, both national and external’.
It is of note that in 2020 Macau Legend was subject to a partial takeover by junket operator Tak Chun, whose boss Levo Chan – who was elected CEO of Macau Legend in December of 2020 – is currently on trial for alleged money laundering and criminal association.
Macau Legend has undergone numerous board shifts since Chan was detained in January of 2022 and the company has not given detailed information on its continued plans for the project.
In December, news agency Lusa noted that the country’s investment agency was expecting Macau Legend to present its revamped construction plans “shortly” and that the group was interested in “moving forward” with the development.
Under the initial agreement, Macau Legend was to be granted a 25-year casino concession and a 10 year exclusivity period nationwide for land-based, online and sports betting from the date operations commenced.
