he long-stalled integrated resort is one of the largest tourism projects in the region.
Located in the Chu Lai open economic zone, the resort was initially developed by VinaCapital and Genting Malaysia and planned to feature five-star hotels, villas and a casino on a 1,555-hectare parcel. Genting, however, pulled out in 2012 due to Vietnam’s tight restrictions on gambling that only allow foreign passport holders to access casino and gaming facilities.
VinaCapital’s Alternative Investment Market-listed fund VinaLand Limited offloaded its entire stake to Gold Yield Enterprises Limited, a unit of Chow Tai Fook, changing its position to strategic shareholder. The stake was sold at a total valuation of 53.5pc above the unaudited June 30 net asset value of the investment and results in net proceeds of $10.5m.
“The disposal of this land is consistent with the company’s strategy to divest selected assets by the end of the current term,” said the company in a statement, adding that “given the complexity of the project and the on-going challenges it faces, the buyer has requested VinaCapital continues to be involved in the project.”
Under the agreement, VinaCapital is obligated to purchase an additional stake of 9.36pc in the project and will also receive an equity interest of 22.55pc in return for the transfer of economic rights to gaming it had secured for the facility. The project has reduced in size to 1,000 hectares and added an extra 20 gaming tables, making it more attractive to investors.
“VinaLand had completed initial investments in the project, however continuing with large-scale, long-term development would require significant future capital commitments. We believe this is a very positive outcome for our shareholders given VinaLand’s current mandate and will allow for additional capital to be distributed,” remarked VinaCapital.