Wynn Macau Contractor May Owe $200 Million for Casino DelayDaryl Loo and Daniela Wei
Wynn `concerned' with building progress by contractor Leighton
Wynn Palace opening was earlier postponed to June 25 on delays
Wynn Macau Ltd. said its contractor for its second casino in Macau could be liable for as much as $200 million in damages if the Wynn Palace project experienced further delays.
Leighton Contractors (Asia) Ltd., part of Australia’s CIMIC Group Ltd., has been issued with a letter “to reinforce the importance” of meeting the scheduled June opening, Wynn Macau Ltd. said Wednesday in a stock exchange statement. The company said in November the $4.1 billion casino would be postponed by three months, until June 25, 2016, due to construction delays.
“We are concerned that with your current levels of progress in the execution of the work, you will fail to achieve the third interim milestone,” the Macau casino operator said in the statement signed by billionaire founder Steve Wynn. Wynn Macau intends to deduct payments from Leighton “in respect of any failure by you to meet your completion obligations,” it said.
“We are not announcing any delay of Wynn Palace,” said Michael Weaver, spokesman for Wynn Resorts Ltd., parent of the Macau unit. He declined to comment on the likelihood and potential impact of a delay to the project. Fiona Tyndall, a spokeswoman for Sydney-based CIMIC, previously called Leighton Holdings, declined to comment.
CIMIC shares fell as much as 1.5 percent to A$24.17 in Australia, the biggest intraday drop in more than a week. Wynn Macau jumped as much as 4.7 percent to HK$7.88 in Hong Kong to the highest level since Jan. 8, amid a broader rally in casino stocks.
The Wynn Palace, one of a number of new casino resorts due to open in Macau this year, is to feature 1,700 hotel rooms, a lake with gondolas and fountains, meeting space and a casino. It is the first for the company in the developing gambling Cotai area of Macau.
The new resorts are highly anticipated as more mass-market attractions and a transformation of the Cotai Strip “from the construction zone it’s been for two years,” should help Macau “regain its allure and buzz” among China’s growing consumer class, according to Bloomberg Intelligence in a note last week.