Asian Coast Development (Canada) Ltd. (ACDL), the owner and developer of the Ho Tram Strip beachfront complex of destination integrated resorts and residential developments in southern Vietnam, announced today that it has entered into a subscription agreement with Pinnacle Entertainment, Inc. (NYSE: PNK) under which Pinnacle will acquire a 26% equity interest in ACDL in exchange for a $95 million investment in ACDL. In addition, Pinnacle will enter into a management agreement through 2058 for the second integrated resort of the multi-phase Ho Tram Strip destination resorts project. The Ho Tram Strip is located approximately 80 miles southeast of Ho Chi Minh City, Vietnam’s largest city that attracts the majority of Vietnam’s 5 million tourists each year. The agreements include a potential 20-year extension of Pinnacle’s management contract and proportional representation on ACDL’s board of directors and are subject to customary closing conditions.
The Ho Tram Strip will be Vietnam’s first destination integrated resort and gaming complex and is scheduled to open in multiple phases, beginning in 2013. The multi-property resort complex is being developed by ACDL under an investment certificate from the Government of Vietnam, the first of its kind. The first resort of the Ho Tram Strip, MGM Grand Ho Tram, is currently under construction and will be managed by MGM Hospitality, a subsidiary of MGM Resorts International. The first phase of the MGM Grand Ho Tram will feature 541 luxury guest rooms and suites, a full spectrum of world-class restaurants and amenities, exquisite VIP accommodations, a conference center, and a spectacular entertainment area featuring 90 live table games and 500 electronic games.
“This transaction is another major milestone for ACDL and accelerates the development of our second resort and the entire Ho Tram site. Importantly, it builds critical mass at Ho Tram, brings a second highly respected operator into close partnership with ACDL, and enhances our plans for further growth and expansion,” said Lloyd Nathan, Chief Executive Officer of Asian Coast Development Ltd. “We now have two of the world’s leading gaming companies managing our integrated resorts in Vietnam, confirming Ho Tram as the next large-scale destination opportunity after Macau and Singapore. As a result of this transaction, we also now have the backing of two substantial institutional and corporate sponsors, Harbinger Capital Partners and Pinnacle Entertainment.”
The second integrated resort of the Ho Tram Strip, to be jointly developed by ACDL and Pinnacle and managed by Pinnacle, will be owned by ACDL. It is expected that the second integrated resort will be similar in scope to the MGM Grand Ho Tram resort that is currently under construction. It will be jointly branded by ACDL and Pinnacle as a distinct and premium resort.
“Participation in the development of the Ho Tram Strip was a highly sought after opportunity in the gaming industry. We are delighted to be a part of Vietnam’s strategic vision for the further development of its tourist industry, an investor in ACDL and a partner on the Ho Tram Strip project,” said Anthony Sanfilippo, President and Chief Executive Officer of Pinnacle Entertainment. “We look forward to working collaboratively with ACDL, Lloyd Nathan and the rest of their management team to develop the Ho Tram Strip.”
“We are excited about the growing list of world class operators and development partners that have joined the Ho Tram project. Pinnacle Entertainment brings tremendous operating expertise and vision to ACDL, and we are pleased to welcome them,” said Philip A. Falcone, Chief Executive Officer of Harbinger Capital Partners, a leading private investment fund and ACDL’s majority investor. “We look forward as Lloyd Nathan and the ACDL team continue to build on this transaction and realize the immense potential of the Ho Tram Strip opportunity.”
Mr. Nathan added, “Pinnacle joins a strong Ho Tram Strip development team, including MGM Hospitality. We look forward to working with Anthony Sanfilippo and everyone at Pinnacle on the creation of the premier gaming and leisure destination in Southeast Asia.”
“We are delighted to see critical mass being created at Ho Tram and look forward to welcoming our new neighbors. This transaction is an important endorsement for Vietnam’s growing profile as a world-class tourism destination and we look forward to opening the MGM Grand Ho Tram in 2013,” said Gamal Aziz, President and CEO of MGM Hospitality.