July 8, 2011
Pinnacle invests in Asian Coast Development, eyes Vietnam expansion
Pinnacle Entertainment has entered into a subscription agreement to acquire a 26 percent equity interest in Asian Coast Development (Canada) Ltd. (ACDL), the owner and developer of the Ho Tram Strip, Vietnam’s first destination integrated resort and gaming complex, in exchange for a $95 million investment in ACDL securities.
Upon the closing of the transaction, Pinnacle will enter into a management agreement through 2058 (with the potential for a 20-year extension) for the second integrated resort of the multi-phase Ho Tram Strip destination resorts project located approximately 80 miles southeast of Ho Chi Minh City, Vietnam’s largest city which attracts the majority of Vietnam’s five million tourists each year. The transaction documents provide for proportional representation on ACDL’s board of directors and are subject to customary closing conditions.
The Ho Tram Strip will be and is scheduled to open in multiple phases, the first being MGM Grand Ho Tram, which is currently under construction with a planned opening in 2013. 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. Pinnacle and ACDL will develop the second project, which will be similar in scope to MGM’s.
“Our investment in ACDL and long-term management agreement for the second integrated resort bring meaningful strategic benefits to Pinnacle, including further diversification and potentially very significant returns on invested capital,” said Anthony Sanfilippo, president and CEO of Pinnacle Entertainment, in a statement.
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