Sands China gets approval to delay Macau casino construction
Sands China says the Macau government has given it more time to build a casino resort on a site in Cotai but expects to pay a penalty for the delay.
The Macau arm of Las Vegas gaming billionaire Sheldon Adelson said in a filing to the Hong Kong stock exchange that it had received approval to extend the deadline for the completion of the project on parcel three to April 17, 2016, from April next year.
The government informed the casino operator in a letter that it would be notified of the penalty amount due to the construction delay, according to the statement.
Sands Macau spokeswoman Melina Leong said last week that the casino developer was behind schedule because it had been focusing on another project - the US$5 billion Sands Cotai Central on parcels five and six.
Grant Govertsen, an analyst at Union Gaming Research Macau, said at the time that he expected the firm to get the approval as 'the government will understand the reason why they couldn't meet the deadline'.
Donald Cheng, an analyst at Haitong International Securities, said he believed Sands China could finish the delayed resort in 2016. He said construction of a new project would take three to four years. However, Macau's labour situation is challenging because of the number of projects.
Cheng said: 'Casino operators are moving their focus to Cotai, seeing it as the future for development.'
Casino rival Wynn is working on a US$4 billion resort on Cotai, while Galaxy Entertainment is building the second phase of its HK$16 billion Cotai resort.
Melco Crown Entertainment is waiting for the government's construction permit to bring about a resort called Studio City, while MGM and SJM are awaiting land grants on the Cotai Strip.
Increasing numbers of wealthy mainland tourists are visiting Cotai for luxury shopping and grand US-style gambling and entertainment.
Macau's gaming revenue surged 42 per cent last year to almost six times that of the Las Vegas Strip, official data showed. The former Portuguese colony is the only place in China where casino gaming is legal.
Construction on parcel three has yet to begin. Sands said the design details were being finalised and would be revealed at 'an appropriate time'. Shares of Sands rose 2.4 per cent to close at HK$23.3 yesterday, outperforming the benchmark Hang Seng Index, which edged up 0.15 per cent.