SJM and STDM Form Revised Agreements over Redevelopment of Hotel Lisboa, Macau
(Hong Kong, 20 March 2009) – The Boards of Directors of SJM (Sociedade de Jogos de Macau, S.A) and STDM (Sociedade de Turismo e Diversões de Macau, S.A.) have reached an accord concerning the Purchase Option Agreement for Nam Van Lake Lot 11-A and the Purchase Option Agreement for Hotel Lisboa.
After careful consideration of the prevailing market conditions, the substantially changed global economic environment and the volatility in the financial markets, the Boards of Directors of SJM and STDM have agreed that it is no longer appropriate to proceed with the Options in their original format.
In the opinion of the Board of SJM Holdings Limited (HKSE Code: 880), the listed holding company of SJM, completion of the Options within the timeframe envisaged at the time of the Company's listing on the Hong Kong Stock Exchange would not have been in the best interests of SJM Holdings or its shareholders.
Whereas the Group's internal funds are sufficient to complete the acquisition of the two properties, the proposed redevelopment of the Lisboa Site would have imposed an unnecessary burden on its financial resources amid the current economic climate. In addition, the Board has determined after consideration that the development of Nam Van Lake Lot 11-A would not add immediate value to the Group's core business.
Under the terms of the newly devised Deed of Settlement and Variation for Hotel Lisboa, it has been agreed that STDM and SJM will jointly redevelop the Hotel Lisboa Site. STDM will manage the redevelopment and intends to maintain a majority holding in the overall project. SJM will be part of the project management team and will be closely involved in the overall design of the project and its timing to ensure that it aligns with SJM's other gaming properties in the Lisboa District.
In view of the current market conditions in Macau, STDM and SJM do not intend to redevelop the Lisboa Site immediately. Both companies will embark upon the considerable preparatory work including on-going design iterations and seeking necessary approvals from relevant departments of the Government of the Macau SAR.
Dr. Ambrose So, Chief Executive Officer of SJM Holdings Limited, said, "All parties involved are enthusiastic to proceed with the Lisboa redevelopment project. However, we are committed to delivering shareholder value and to have gone ahead while ignoring the extreme market conditions would not have been appropriate." He went on, "Under this new and clarified arrangement, we can take the appropriate steps to deliver true value to our shareholders."