Agreement precursor to Chinese Strategic Holdings subsidiary sub-leasing Tinian casino
The owner of Tinian Dynasty Hotel and Casino is on the verge of signing a sub-lease agreement with yet another indirect wholly-owned subsidiary of Chinese Strategic Holdings Ltd. after entering into a memorandum of understanding with Gain Millenia last Jan. 19.
The MOU sets forth the principal terms and conditions upon which Hong Kong Entertainment (Overseas) Investments Ltd. and Bermuda-based Chinese Strategic Holdings would enter into the lease of the Tinian Dynasty, which is the only existing casino on the island since its establishment in 1998.
Under the MOU, British Virgin Islands-based Gain Millenia would give Hong Kong Entertainment a HK$50 million (around $6.4 million) refundable deposit for partial settlement and discharge of the total rent for the initial term, which is a fixed term of six years starting from the execution of the lease.
Under the MOU, conditional upon approval of the Tinian Casino Gaming Control Commission, Gain Millenia will have complete control over TDHC hotel operations as well as its gaming operations during the term.
“The tenant [Gain Millenia] shall be free to conduct the hotel operations and the gaming operations on the hotel-casino complex without interference from or direction by the landlord or any of its affiliates. Neither the landlord (or any of its affiliates) nor any agent or representative of the landlord (or any of its affiliates) shall exercise, either directly or indirectly, management or control of any kind whatsoever, over the conduct of the hotel operations or the gaming operations by the tenant on the hotel-casino complex during the term,” read the MOU.
The MOU also states that Gain Millenia would try its best to forge a hotel management consultancy agreement with an internationally renowned conglomerate that has extensive experience in gaming operation and hospitality and/or casino management.
Chinese Strategic Holdings, subject to execution and commencement of the lease, would also try its best to procure relevant gambling facilities and businesses, comply with the applicable laws in the areas where such activities operate; and/or not contravene the gambling ordinance.
If necessary, Chinese Strategic Holdings would also consult and seek advice from professional advisers on such compliance.
Meanwhile, the MOU stated that should the terms of the MOU or the lease be deemed not acceptable to TCGCC or any other regulatory authority, Gain Millennia and Hong Kong Overseas “shall use their respective best endeavors to agree on any revised terms of the MOU or the lease which can best meet the request and/or requirement of or conditions imposed by TCGCC and/or the regulatory authorities concerned.”
The MOU also set a June 30, 2015, deadline for the execution of the lease agreement. Failure to complete the deal would result in the refund of all the HK$50 million deposited by Gain Millennia.
An update on the Seattle Summit attended by executives of Chinese Strategic Holdings as well as TCGCC executive director Lucia Blanco-Maratita, the commission’s legal counsel, and other parties saw them discuss, among other things, certain operational matters of Tinian Dynasty, the casino operator requirements under the law of CNMI, and the specific terms and conditions of the MOU and the proposed lease agreement.
During the Seattle Summit, TCGCC also preliminary agreed that the structure of the MOU is feasible. Subject to certain compliance issues being fulfilled, TCGCC will further discuss with Chinese Strategic Holdings the regulatory compliance aspect of the MOU and the proposed lease agreement.