A joint venture proposal for the Cotai Strip in Macau, signed last March between Las Vegas Sands Corporation and Regal Hotels International Holdings Ltd, has been abandoned after the two companies could not reach terms on the final details. Regal, a publicly listed company on the Hong Kong Stock Exchange, has said that the memorandum of understanding ceased to have effect on Tuesday and that it will apply to the Macau government for approval to continue to develop the project on its own.

The agreement last March was for Regal to build a large entertainment complex to include a 130,000 sq ft casino and 1500-seat theatre that would be leased to Sands. Stating that the company had invested time, effort and resources in the project, it will pursue plans to build three hotels, convention plaza, shopping, restaurants and entertainment areas plus a hotel training school. The casino, when built, would be leased to a gaming operator authorised in Macau. The two-phase project is scheduled to be completed in early 2008.

Sands had signed letters of intent with around eight companies to build casino resorts along the Cotai Strip in Macau. At a press conference on 17 March this year, Sands Chairman and CEO Sheldon Adelson said, “COTAI Strip Macao is destined to become Asia's Las Vegas. By assembling a critical mass of world-class hotel brands this development will reposition Macao as an international tourist and convention and exhibition destination.” He was accompanied at the press conference by executives from world-renowned hotel brands and leading investment companies, and a massive model of the proposed COTAI Strip was unveiled.

With completion due in early 2007 for the US$1.8 billion Venetian Macao, the luxury resort is expected to serve as an anchor for the Cotai Strip. Last June Sands was able to retire all its outstanding debt on Sands Macao from excess cash flow in its first year of operation - it opened in May 2004. In a second quarter results report the company declared it had made the strategic decision to own more real estate and operating businesses in Cotai, allowing Sands to benefit more from the burgeoning market. Construction is due to commence this month on an expansion of Sands Macao that will increase gaming capacity by over 65%. (E-09.08.05)

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