By JAMIE LEE
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CAPITALAND'S joint casino project partner in Macau said that disagreements with its business partner New Cotai had led to delays in getting land-use approval.
CapitaLand - which owns a 20 per cent stake in the US$2 billion Macao Studio City through a joint venture firm with eSun Holdings Ltd known as EAST Asia Satellite Television (East) - said last Saturday that it will work with eSun on solutions to enable the project to progress.
It also said that it has the option to 'put back' its shares to eSun if certain conditions are not met by September 2011 'or such other date as may be mutually agreed'.
In a statement last Friday, Hongkong-listed eSun said that progress for Macao Studio City has stalled due to differences of opinion between East and its US partner New Cotai, which has a 40 per cent stake in the joint venture company in charge of the project, Cyber One.
The Macau government had not given permission for Cyber One to make modifications to the land and raise the developable gross floor area of the site to about six million square feet.
The Macau government has asked for information from the joint venture about the project plans, and both East and New Cotai 'have yet to formulate an agreed response'.
East said that it is ready to present updated proposals on prospective financing and construction to the government, but New Cotai, it claimed, has refused to make 'any substantive response'.
The partners are looking at possible solutions, which include bringing in new investors, a sale of all or part of its interest by New Cotai, or a restructuring of the parties' existing interests.
'However, East recognises that a solution to the differences may necessarily involve litigation,' it said.
Cyber One, with contributed capital of US$200 million, has not secured enough funding to develop the project yet. eSun believes that the funds would come in once the differences are resolved.
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