Lawrence Ho’s planned casino in Russia’s Primorye region has added a new joint venture partner while fending off a legal claim by a disgruntled wife of one of Ho’s Russian partners. Ho, the chairman of Hong Kong-listed Melco International Development and a veteran of the Macau casino game via the Melco Crown Entertainment joint venture with Australian casino operator Crown Ltd., confirmed in July that he was buying into an unfinished resort-casino project outside Vladivostok, not far from the Chinese border. Up to that point, the project had been under the control of Russian developers Oleg Drozdov and Alexsey Simanchuk.
The newest member of the joint venture is Firich Enterprises Co. Ltd. (FEC), a subsidiary of Taiwan-listed GreTai Securities Market. FEC manufactures, installs and maintains electronic gambling machines (EGM), lottery terminals and other point-of-sale gear. Melco issued a statement saying FEC would provide EGMs “specifically tailored for the Russian mass market as well as assisting to help develop [the resort’s] clientele from Taiwan and Korea.” The $130m first phase of the casino-resort is set to open in September 2014 while the proposed $500m second phase has yet to establish an opening date.
The new setup of the Oriental Regent Ltd. joint venture breaks down thus: Ho will hold a 51% stake – 5% via Melco and 46% via the Ho-controlled Summit Ascent Holdings – bringing Ho’s total investment in the project’s first phase to HKD 514m ($66.3m). Drozdov will hold a 30% stake and FEC the remaining 19%.
If you read the above and wondered why Simanchuk’s name had dropped off the partner list, he apparently sold his stake to Drozdov’s Elegant City Group Ltd. earlier this month. However, the South China Morning Post reported that Summit Ascent had received a letter on August 23 from someone claiming to be Simanchuk’s wife, who also claimed to be in the process of divorcing Simanchuk. More importantly, the woman claimed she hadn’t been consulted on the sale of Simanchuk’s stake in the unfinished casino and therefore the sale was illegal. A Summit Ascent spokesperson said there was “no valid legal basis for any claim of those matters which could adversely affect the transaction.” Insert Russian variation of ‘hell hath no fury’ here…
