After completing the due diligence and meeting several conditions, the company said Japanese businessman Yoshinari Shun also officially signed a letter of intent promising to acquire Saban Legends. In addition, if the contract meets all of the above requirements, Yoshinari will purchase the entire stake in MLD Resort Laos Limited, a subsidiary of Macau Legend, which owns all of Saban Legends. In a related development, the company wrote about the possibility of selling Saban Legends, saying, "Both sides can enter into a formal contract within 14 days after completing due diligence review of Saban Legends by the target company and the buyer."
"We can sign a formal contract by mid-August, and Shundo Yoshinari will have to pay an initial down payment of $10 million as the contract process proceeds, which will be settled in stages according to the contract, and buyers will have to pay an additional $12.5 million when signing the formal contract." In addition, the company said it will pay the remaining amount of $22.5 million when signing an official contract. However, under normal conditions, a formal contract must be signed by the second half of September.
Citing the reason for the sale, the company said: "Rao PDR's gaming and hotel business generated FY22 revenue, but financial performance is unstable and such businesses are subject to increasingly onerous constraints in Rao PDR, which could limit future profitability. If the potential disposal is realized, the group will be able to reallocate more resources to its business operations in Macau and overall future development. The Board believes that the conclusion of the letter of intent and potential disposition is in the interests of the company and its shareholders as a whole."
Prerequisites:
Among the terms of purchase previously stated by Macau Legends for Laos casinos is "Savan Legends enters into a uniform tax agreement with the Lao PDR government on the terms agreed by all parties, with an initial game license period of 99 years, and there are no unfavorable conditions for Mr. Yoshinari included in the certificate of land ownership." Upon meeting and completion of the purchase terms, the company said it "expects to pay the full balance of US$45 million within three months of signing a private contract."
In addition, Macau Legends, which signed a new three-year contract with SJM this year to continue operating casinos at Macau Legends Palace, recently said it lost HK$67.2 million in the 12 months due to the COVID-19 pandemic and related border restrictions.