Star Cruises Ltd is reviewing the deal structure of its planned US$175 million investment in Macau following pressure from the Singapore government on the tie-up, which will in turn provide casino mogul an interest in the city state’s integrated resort.

Star Cruises said in statements to the Singapore and Hong Kong bourses yesterday that it had delayed sending out a circular with regards to the deal as it was “reviewing the structure in relation to its investment in Macau Land Investment Corporation”.

On Jan 22, the company and Genting International plc said they were venturing into the development of a US$617 million Resorts World at Macau, which includes a casino to be operated by Ho. Star Cruises is an associate company of Genting Bhd.

If the proposed venture in Macau goes through, Ho would end up with a 7% stake in Star Cruises, which has a 25% stake in the Genting group’s US$3.5 billion casino project in Singapore.

However, the Macau venture has received an adverse response from the Singapore government and its Ministry of Home Affairs said on Feb 9 said that it was seeking clarification from Genting on the deal.

Star Cruises’ Hong Kong and Singapore-listed shares fell HK$0.07 to HK$2.75 and S$0.01 to S$0.39 while Genting International fell S$0.06 to S$0.89.

Analysts were surprised of Star Cruises’ foray into the Macau gaming industry with Ho as it could even cost the Genting group its Sentosa casino project.

“Any Macau-related stock has done well, which is why they went ahead but we had anticipated that the deal with Ho may not be so smooth as the Singapore government does not want him involved.

“At the end of the day, the Singapore government has the final say and they can say if the deal is off,” said one analyst.

He said the Singapore government was against Ho’s participation due to news reports on his alleged involvement with organised crime in Macau. Ho had submitted a failed bid for a casino licence in Singapore through Melco International Development Ltd, which is controlled by his son.

Another analyst described the venture as a blunder, and has raised doubts on how Star Cruises would be able to structure the deal into a win-win situation for all parties

“They didn’t think this through. If they want to go to Macau, they can’t go with . The Macau casino is small compared to Sentosa and they need to do all they can to keep Sentosa,” he said.

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