Chinese casino operator and real estate developer Chow Tai Fook Enterprises Ltd. has taken a controlling stake in the long-stalled $4b Nam Hoi An casino resort project in Vietnam.
VinaCapital’s Alternative Investment Market-listed fund VinaLand Limited has disposed its 100% stake in the Nam Hoi An casino resort project to Gold Yield, a unit of Chow Tai Fook. The stake was valued at 53.5% above the unaudited net asset value recorded at the end of the first half of 2015, and had resulted in a net gain of US$10.5m for VinaCapital.
“The disposal of this land is consistent with the company’s strategy to divest selected assets by the end of the current term, as stated at the time of VinaLand’s extraordinary general meeting in November 2012, and net proceeds of the realizations will be returned to shareholders,” said VinaCapital in a statement.
However, due to “the complexity of the project and the ongoing challenges it faces, Chow Tai Fook has requested that VinaCapital continue to be involved in the project.” VinaCapital is obligated to purchase a 9.36% stake in the project, and will receive an equity interest of 22.55% in return for the transfer of certain economic rights to gaming it had secured in respect to the project.
In October, VinaCapital CEO Don Lam said he expected the Quang Nam project would commence construction sometime mid-2015. The project’s first phase would feature 90 gaming tables when it opens in either late 2016 or early 2017.
The $4b casino resort project, which would comprise five-star hotels, villas, and a gaming facility aimed at the foreign tourist market, was initially being developed by VinaCapita and Genting Malaysia Berhad.
In late 2012, Genting announced its withdrawal from the project, forcing VinaCapital to seek new partners. VinaCapital sought approval from the provincial government for Peninsula Pacific to replace Genting one year later but this proposal failed to materialize.
Chow Tai Fook is owned by the family of Cheng Yu Tung, the fourth richest man in Hong Kong, who expressed his interest in the casino project in Quang Nam in 2014. The Quang Nam government awarded a revised investment certificate to the South Hoi An resort project in March 2014 with involvement of Chow Tai Fook and VinaCapital.
Chow Tai Fook Enterprises is expected to provide 25% of the capital for Echo Entertainment’s Brisbane project. It was also reported to have sent a letter of intent to invest US$1.6b in a resort casino in Incheon, near South Korea’s capital Seoul.