Wynn Macau Cautions Casino Contractor For Compensation Up to $200 Million Over Construction Delay

By Staff Writer

Jan 28, 2016 06:30 AM EST

Wynn Macau Ltd. has cautioned its construction contractor, Leighton Contractors (Asia) Ltd. of counting delay compensation up to $200 million through a letter. The contractor entity appears to be a part of Australia's CIMIC Group Ltd., which has own the construction contract of $4.1 billion casino project in Macau during 2013.

The cautionary statement has been included in a written letter centering construction delay in the upcoming Luxurious Cotai Casino resort, naming Wynn Palace in Macau. The caution will be implemented provided the contractor fails to achieve the third interim milestone and finishes the project by the revised deadline of June 25, according to a report published in the GGR Asia.

Earlier, in November, the casino operator has revised the opening schedule from March 25 considering construction delays. In the letter addressed to Leighton, Wynn suggests to reinforce the importance of meeting the scheduled June opening. However, a copy of the letter, signed by billionaire founder Steve Wynn, has also been forwarded to Hong Kong Stock Exchange on Wednesday, where the gaming operator is listed, reports Bloomberg.

As per the contents of the letter, the contractor group will also have to count an additional $US 6.2 million in payments related to delays in achieving earlier milestones and miss an early completion bonus of $US 38 million, reports The Sydney Morning Herald, quoting Wynn's letter as the source.

As aftermaths, CIMIC shares have fallen as much as 1.5% to A$24.17 in Australia, the biggest intraday drop within more than a week. Meanwhile, Wynn Macau shares have jumped as much as 4.7% to HK$7.88, the highest increase since January 8.

Wynn Palace, the casino resort in Macau is scheduled to be opened during mid of 2016. The yet to be finished casino will include 1700 hotel rooms, a lake with traditional gondolas and fountains, meeting arena and a relatively huge gorgeous casino.

Earlier, Telsey Advisory Group analysts David Katz and Brian Davis have cautioned over probability for pushing out the scheduled opening date further. They have also advised the construction company to discuss on the quality of internal decorations and cosmetic touches.

The casino resorts are expected to offer mass market attractions and act as a transformation of the Cotai strip to a alluring tourist site. It is expected to bring back the former buzzing Macau to the growing consumer class from China.

Wynn Macau Ltd. has initiated a project worth $4.1 billion for building a casino resort in Macau. Leighton Contractors (Asia) Ltd., the contractor has already been favored with a revision in completion deadline. But present work progress suggests the contractor is going to miss the deadline again. Steve Wynn, founder of Wynn Macau has cautioned the contractor for counting compensation up to $200 million for missing the schedule. The news has appreciated share prices of Wynn Macau Ltd.

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