Casino operator Hard Rock International (HRI) has quietly exited its Cyprus integrated resort joint venture, according to stock market filings.
On Monday, the government of the Republic of Cyprus officially signed its contract with a consortium consisting of HRI, Hong Kong-listed Melco International Development and local firm Cyprus Phasouri (Zakaki) Ltd, to build Europe’s first integrated resort project in the Limassol region. The consortium was granted the lone Cyprus casino license late last year.
But Monday also saw Melco file papers with the Hong Kong Stock Exchange indicating that it had entered into an agreement to purchase HRI’s interest in the consortium. Melco and HRI each held a 35.37% stake in the joint venture but the deal will see Melco’s share rise to 70.74%, effectively putting it in the driver’s seat for all future decisions regarding the project.
The price HRI will receive for selling its stake in the Cyprus project to Melco wasn’t disclosed and the ownership change is subject to approval by the Cypriot government. HRI has yet to issue any statement of its own regarding the sale but the imminent exit from its Cypriot JV follows just days after the HRI-Melco tandem officially withdrew a similar tandem bid on an integrated resort project in Spain’s Catalan region.
HRI, which is owned by Florida’s Seminole Tribe, may be temporarily curbing its international ambitions in order to redirect resources toward its pricey new domestic expansion project. In March, HRI announced that it had reached a deal to acquire Atlantic City’s Trump Taj Mahal casino from former owner Carl Icahn. HRI initially pledged to spend $375m remodeling the property into the music-themed Hard Rock Atlantic City, but recently announced that the makeover budget had swelled to $500m.
Regardless of who’s running the Cyprus consortium, commerce minister Giorgos Lakkotrypis said Tuesday that it was in their interest “to start operations as fast as possible,” as the 15-year exclusivity on casino gambling that the consortium was granted under the terms of their license “started ticking as of yesterday.”
The consortium has previously stated that it hopes to open the resort’s first phase by 2019, but the temporary gaming facility in Limassol allowed under the license could open later this year.