MZ announced the execution of a letter of intent with Palawan Development Group to open the first casino on the island of Palawan in the Philippines. The letter of intent is contingent on due diligence and approval of the board of AMZ.
Palawan is an island with a population of approximately one million and is an important destination in the Southeast Asian region owing to two world heritage sites, beautiful beaches and its proximity to major Asian cities. It is one of the fastest growing eco-tourist destinations in Asia and we believe now is a perfect time to secure our position in this territory.
AMZ and PDG have an agreement to purchase an existing hotel in Puerto Princesa that AMZ will convert our first hotel and casino. The purchase of the hotel and the conversion to a casino is expected to take approximately 6 months. After assessing demand, AMZ will make a decision as to whether the construction of a purpose built casino facility is justified.
The total cost for establishing our first hotel and casino on the island is expected to be approximately us$ 6 million including acquisition of the hotel, renovations, installation of gaming equipment and start-up costs. AMZ and PDG have obtained financing of approximately us$ 2 million for the acquisition of the hotel - resulting in a total capital requirement of us$ 4 million for AMZ.
AMZ’s initial financial commitment, to be met from its existing resources, would be approximately us$ 2 million. It is in discussion with other parties regarding the balance which would fall due over a number of months.
AMZ will be in control of the project, subject to a profit participation to be granted to PDG in exchange for arranging the deal and performing various other activities. AMZ intends to issue a more comprehensive release once the transaction is approved, which is currently expected to be on or around 15 October 2008.
Michael Treanor, CEO of AMZ said: ’This move is in line with our strategy to seek investment opportunities in other emerging gaming markets in Asia in addition to our site in Taiwan. The Philippines is a well established, highly regulated gaming market and the Island of Palawan represents a prime opportunity for AMZ.’
Bill Wyland, Palawan Development Group said: “It is exciting for us to be working with AMZ and a Board that has such solid international gaming experience. We look forward to working closely with Michael and the team over the coming months as we work on the conversion of the hotel into Palawan’s first casino site.”