Macau Legend Development Ltd, a casino and hotel resort, has announced its plans to sell its gaming property in Savannakhet, Laos. The operator is offering its Savan Legend casino resort in Laos for an initial price consideration of $39 million with potential for further adjustments.
The company expects to gain approximately HKD47 million (US$6.0 million) from the sale of the Laos property, based on the fact that the Savan Legend resort reported HKD182 million (US$23.3 million) in consolidated net liabilities as of October 31, 2023. Although these net liabilities have not been audited or specifically determined, the amount is almost equal to the loss sustained by the resort in the first half of 2023.
The company’s financial report revealed a significant decline in revenue, with a 22.7 percent year-on-year revenue decline to HKD420.2 million (US$53.8 million) for the first half of 2023, indicating an overall decline in property operations. Macau Legend stated that the gaming and hotel business in Laos was profit-making in 2022, but its financial performance is unstable and subject to increasingly onerous restraints, limiting its future profitability.
In an effort to strengthen its cash flow, Macau Legend plans to sell the Savan Legend casino resort in Laos to a Japanese purchaser, Shundo Yoshinari, and an independent third party. The initial price consideration for the sale was $45.0 million, but has since been adjusted to $39 million.
The company expects to use the gain from the sale to strengthen its cash flow, enhance liquidity, and reallocate more financial resources to its business operations in Macau and for overall future development. This decision follows the company’s August report, which compared the H1 2023 loss with the figures from the same period of 2022 to verify a three-time loss reduction and a significant revenue decline, signaling the need for strategic restructuring and re-investment for future growth.