Macau Legend Development Limited has announced that it will contest the decision by the Cape Verde government to terminate contracts previously awarded to the gaming company for the development of an integrated resort in the African country.
Last week the Cape Verde government announced it had terminated its contracts with Macau Legend Development (MLD), claiming repeated violations of obligations related to a €250 million ($264.7 million) tourism and gaming investment in Praia.
The government stated that MLD “also violated” the legal framework for gaming operations, “by transferring, without the authorization of the Government of Cape Verde, ownership of more than 20 percent of the share capital.”
The project, initially announced in 2015, has not progressed since construction began in 2016, leading to significant local opposition, particularly from environmental groups. The government plans to reverse the assets involved in the project, which remains largely incomplete, with only minimal construction visible.
In a statement issued by Macau Legend’s board, the gaming company stated it was informed by the Government of Cape Verde on November 19th, 2024, about the termination of an agreement established by its indirect subsidiaries, MLD Cabo Verde Resorts SA and MLD Cabo Verde Entretenimento SA.
These subsidiaries are primarily involved in the hotel and gaming industry in Cape Verde and had agreements with the state concerning the construction and operation of a hotel casino and residential infrastructure in Cidade da Praia Bay.
‘The Cape Verdean government claims that the subsidiaries have failed to meet project deadlines and have not completed the Investment Project as stipulated in the Convention. Consequently, the government asserts its right to terminate both the Convention and the associated Concessions, allowing it to take control of all assets linked to the subsidiaries, including those already constructed’, Macau Legend noted.
‘In response to this development, Macau Legend is actively seeking legal counsel in Cape Verde and plans to vigorously contest the government’s allegations to protect the interests of the Company and its shareholders.’
The announcement signed by Macau legend CEO Li Chu Kwan indicated that, as of June 30th of this year, the estimated carrying value of the affected assets was approximately HK$47 million ($6 million).
‘The management will assess potential impairments related to these assets, although they do not expect a significant negative impact on the Group’s overall financial position’, the company added.
Macau Legend received a 25-year license from the Cape Verde government, 15 of which were for exclusive operation on the island of Santiago. This gaming concession cost CV Entertainment Co., a subsidiary of Macau Legend, approximately €1.2 million ($1.25 million).
Macau Legend also received a special license to exclusively operate online gambling throughout the country and the sports betting market for ten years.
About a year ago, in an interview with Hong Kong TVB, MLD President and CEO Li Chu Kwan stated that the group intended to close projects in Cape Verde and Cambodia by 2025.
