Melco International Development has sealed its joint venture agreement with CPZ to develop a resort on Cyprus and said it will increase its holding in the project to 75 percent from the current level of 70.74 percent.
The accord is to develop an integrated resort in Limassol and up to four other satellite casinos on the island. The agreement stipulates that Melco Resorts & Entertainment, or another designated unit of Melco International, will manage the project and provide services.
“The company considers that this unique opportunity to develop and operate integrated casino resorts in Cyprus is an attractive business opportunity for the Melco Group, consistent with the Melco Group’s broader objective of establishing itself as a global entertainment and gaming operator,” it said in a release to the Hong Kong Stock Exchange.
“Partnering with CPZ, a strong local partner and member of the CNS Group, is expected to be highly beneficial to the development of the project.”
CPZ is a member of the CNS Group which, amongst others, conducts different businesses including real estate, telecommunications, dairy, large scale farming and export and mining in Cyprus. The Cypriot company will contribute the land for the project in return for shares in the holding company for the IR.
Melco International is paying 160 million euros ($189 million) to increase its stake.
The announcement comes days after Chairman Lawrence Ho announced he was divesting his entire stake in Summit Ascent Holdings, which operates the Tigre de Cristal IR in the Primorye gambling zone in Russia, near Vladivostok.
The zone had been seen as the most promising in Russia due to its proximity to the large population centers of northern China, though so far its performance has disappointed. VIP business from China has increased, though the resort has failed to attract the local mass market due to rampant illegal gambling.
Russia also late last month introduced changes that could potentially double taxes paid by operators in the zone.
Part of the stake was bought by Taiwan’s First Steamship Co.
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