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MGM ‘identified’ Cotai site

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MGM China is waiting for government approval for the concession of a site in Cotai, the company revealed.
“We have identified a site of approximately 17.8 acres [0.07 square kilometres] in Cotai and have submitted an application to the Macau Government to obtain the right to lease this parcel of land. We are awaiting approval of this application,” the company wrote in a stock exchange filing released earlier this week.
MGM did not disclose the location of the site.
“Our management’s experience, disciplined approach to development and prudent capital management put us in a strong position to evaluate Macau’s evolving gaming market and selectively take advantage of opportunities in Cotai,” MGM added.
However, “even if our Cotai project is approved and we are able to develop it successfully, we will continue to be dependent on Macau for our cash flows to the extent we are unable to develop properties in other markets,” the operator advised.
The site that MGM is eyeing is almost three times smaller than the plot targeted by rival operator Wynn Macau, a 52-acre (0.2 square kilometres) area next to City of Dreams and Macau University of Science and Technology.

New investigations

The filing also reveals that MGM signed a non-compete agreement with partner Pansy Ho Chiu King, which will allow the local businesswoman to remain as director and shareholder of rival operator SJM Holdings.
Pansy Ho now holds an indirect 3.77 percent stake in STDM, which controls SJM.
MGM China said Pansy Ho does not intend to participate in STDM board decisions which concern her competing interests. She would have 30 days to solve any breach of the non-compete agreement.
“If Pansy Ho were to reduce her involvement in our company, we may no longer be able to benefit from her extensive relationships and business reputation within the greater China region,” the company wrote, mentioning Ho’s local market knowledge and experience.
The filing also revealed that three US gaming jurisdictions have launched investigations or reviews into the partnership with Pansy Ho, after New Jersey regulators considered her an ‘unsuitable’ business partner, due to alleged links between Ho’s father, Stanley Ho Hung Sun, and organised crime.
“Gaming authorities in Mississippi and Michigan have stated that they are reviewing MGM Resort International’s [MGM China’s major shareholder] association with Pansy Ho and the gaming authority in Illinois has opened an investigation into this association,” the company wrote.

V.Q.

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