Asian Coast DevelopmentLtd (ACDL), the owner and developer of the Ho Tram Strip integrated resortdevelopment in southern Vietnam,has entered into an agreement with Pinnacle Entertainment Inc under which Pinnaclewill acquire a 26% equity interest in ACDL in exchange for a US$95 millioninvestment in ACDL. As a result, Pinnacle will enter into a managementagreement for the second integrated resort on the multi-phase Ho Tram Stripresort project. The Ho Tram Strip is located approximately 130km southeast of Ho Chi Minh City, Vietnam’slargest city that attracts the majority of Vietnam’s 5 million tourists eachyear. The agreements, which run until 2058, include a potential 20-yearextension.
The Ho Tram Strip willbe Vietnam’sfirst destination integrated resort and gaming complex and is scheduled to openin multiple phases, beginning in 2013. The multi-property resort complex isbeing developed by ACDL. The firstresort of the Ho Tram Strip, MGM Grand Ho Tram, is currently under constructionand will be managed by MGM Hospitality, a subsidiary of MGM ResortsInternational. The first phase of the MGM Grand Ho Tram will feature 541 guestrooms and suites, a range of restaurants and amenities, a conference centre,and a large casino featuring 90 table games and 500 electronic games.
“This transactionis another major milestone for ACDL and accelerates the development of oursecond resort and the entire Ho Tram site. Importantly, it builds critical massat Ho Tram, brings a second highly respected operator into close partnershipwith ACDL, and enhances our plans for further growth and expansion,” saidLloyd Nathan, Chief Executive Officer of ACDL. “We now have two of theworld’s leading gaming companies managing our integrated resorts in Vietnam, confirming Ho Tram as the nextlarge-scale destination opportunity after Macau and Singapore. As a result of thistransaction, we also now have the backing of two substantial institutional andcorporate sponsors, Harbinger Capital Partners and PinnacleEntertainment.”
The second integratedresort of the Ho Tram Strip, to be jointly developed by ACDL and Pinnacle andmanaged by Pinnacle, will be owned by ACDL. It is expected that the secondintegrated resort will be similar in scope to the MGM Grand Ho Tram resort thatis currently under construction. It will be jointly branded by ACDL andPinnacle as a distinct and premium resort.
“Participation inthe development of the Ho Tram Strip was a highly sought after opportunity inthe gaming industry. We are delighted to be a part of Vietnam’s strategicvision for the further development of its tourist industry, an investor in ACDLand a partner on the Ho Tram Strip project,” said Anthony Sanfilippo,President & Chief Executive Officer of Pinnacle Entertainment. “Welook forward to working collaboratively with ACDL, Lloyd Nathan and the rest oftheir management team to develop the Ho Tram Strip.”
“We are excitedabout the growing list of world class operators and development partners thathave joined the Ho Tram project. Pinnacle Entertainment brings tremendous operating expertise and visionto ACDL, and we are pleased to welcome them,” said Philip A. Falcone,Chief Executive Officer of Harbinger Capital Partners, a leading privateinvestment fund and ACDL’s majority investor. “We look forward as LloydNathan and the ACDL team continue to build on this transaction and realize theimmense potential of the Ho Tram Strip opportunity.”
Nathan added;”Pinnacle joins a strong Ho Tram Strip development team, including MGMHospitality. We look forward to workingwith Anthony Sanfilippo and everyone at Pinnacle on the creation of the premiergaming and leisure destination in Southeast Asia.”
“We are delightedto see critical mass being created at Ho Tram and look forward to welcoming ournew neighbours. This transaction is animportant endorsement for Vietnam’sgrowing profile as a world-class tourism destination and we look forward toopening the MGM Grand Ho Tram in 2013,” said Gamal Aziz, President &CEO of MGM Hospitality.