Landing International Development plunges in Hong Kong after Philippines scraps US$1.5 billion casino
The presidential spokesman announces the cancellation minutes after the firm broke ground for the project
Gaming and entertainment operator Landing International Development plunged in Hong Kong on Wednesday after Philippine President Rodrigo Duterte said he would cancel its US$1.5 billion casino project in the country.
Shares of the company plummeted by as much as 6 per cent to close at HK$5.98. They have gone down by 28 per cent since July 26 when the company announced the development plan.
The presidential spokesman said on Tuesday the lease contract that Landing signed with a state-owned foundation in March was “grossly disadvantageous to the government” because of “unconscionable” rental payment.
Landing, controlled by Chinese property tycoon Yang Zhihui, broke ground for the casino project in Manila just a few minutes before the announcement. The firm said it would “take all necessary action to amicably resolve all issues and to ensure that the project will proceed as planned” in a statement published on Tuesday night.
“The lease is legal, valid and enforceable,” the firm said, adding that it had not received any official communications from the Philippine government regarding the lease.
The planned casino resort sits on land owned by state-run Nayong Pilipino Foundation, with which Landing has entered a lease contract covering 25 years with a monthly rent of 34.5 million pesos (US$649,826) and 10 per cent of the net profit of the theme parks in the resort, according to Landing’s statement.
Shares of Landing jumped 47 per cent to HK$8.34 on July 26 from HK$5.66 on July 23, after it announced it had obtained a licence from the government-owned Philippine Amusement and Gaming Corp to build the casino.
Duterte’s government has already shelved another casino project before Landing’s. In April, the Philippines gaming regulator halted a US$500 million casino resort project by Macau’s Galaxy Entertainment Group, citing environmental laws.
Landing opened in March a resort on South Korea’s Jeju island, covering 2.5 million square metres.
The company achieved a back-door listing in Hong Kong by acquiring a majority stake in locally-listed lighting and property firm Greenfield Chemical in 2013.
Chairman and chief executive Yang started his property development business in central China’s Anhui province in 2006. The mainland arm of Landing was listed in Shanghai until 2014, when the company had to sell the unit because of mounting debt.