Sands China Ltd. said it was given more time to build a casino resort in Macau on land granted by the government and expects to pay a penalty for the delay.
The Macau government extended a deadline to develop a plot called Parcel 3 to April 17, 2016, from April 2013, Sands said in a statement to the Hong Kong Stock Exchange today. The government also said the casino operator will be notified about the penalty amount for delaying the construction, according to the statement.
Construction has yet to begin on Parcel 3, which is slated for the company’s biggest project after the $5 billion Cotai Central resort opened this year. Sands’s rivals Melco Crown Entertainment Ltd., SJM Holdings Ltd. and MGM China Holdings Ltd. are also awaiting land grants or government approvals for construction in the world’s largest gambling hub.
The new resort will target the mass-market and feature “family-oriented” facilities, Sands said in a separate statement. Sands China shares rose 2.4 percent to HK$23.30 at the 4 p.m. close in Hong Kong.
The Parcel 3 resort would increase Sands’s presence on Cotai, a strip of reclaimed land. Operators are adding resorts there to draw more of the Chinese tourists who boosted Macau’s casino gambling revenue by 42 percent last year.
In regulatory filings with the U.S. Securities & Exchange Commission, parent Las Vegas Sands Corp. had said it would apply for the extension because it would be unable to meet the April deadline.
If the extension isn’t approved, the company may have to take a charge for some or all of its $96.7 million in capitalized construction costs and land premiums as of March 31, 2012, Las Vegas Sands estimated in a May filing.
The company was initially required to complete the development by August 2011 and the Macau government had already given it one extension, according to the May filing.