Visit-Montenegro.com: Russians Turn “Queen” into Casino

(June 30, 2009) Podgorica – The Russian “Korston Group” will become majority owner of hotel company HTP “The Queen of Montenegro” – General Manager of the company, Dragan Ivancevic, confirmed for Daily Press “Vijesti”.

Negotiations on increase in the equity capital of the company “The Queen of Montenegro” entered its final phase, and agreement on taking over the majority stake should be signed in the following week.

- Our Austrian partners left two years ago which is the reason why we were not able to provide standard and quality development of our project, therefore we were looking for a strategic partner in the same business area. Negotiations with “Korston Group” on recapitalization were ongoing for several months and they will be closed by the end of this week. According to the agreement, Russians will get majority stake in the company through capital increase of EUR 37 million which is the exact amount of the loan strain which holds back running a business of this hotel company – Ivancevic explained adding that they have found a good and reliable partner who achieved significant results in hotel management and casino organization on the Russian market.

He remarked that the Russians committed to make investment in the second development phase of the 5 star hotel upgrade and he emphasized that it is expected that the hotel would be open and operational during all twelve months in a year.

One of advantages of the company in Budva which turned the tide their way was the fact that within “The Queen of Montenegro” hotel there is a casino run by the company “Dzek Pot” (Jack Pot) from Podgorica, and Russians were particularly interested in it since their intention is to develop gambling business here.

Daily “Vijesti” reported that there has been an agreement on restoring the casino and fitting it in accordance with modern international standards and to bring the Russian management over in exchange for a certain annual profit.

The owner of “Dzek Pot” is Sava Grbovic and his private enterprise has another casino in the hotel “Crna Gora” in Podgorica. Moreover, Grbovic has 92 percent majority stake in the company “Lutrija Crne Gore” (the Lottery of Montenegro). This company announced opening of the casino in “Splendid” hotel in partnership with the US Company “Playboy” which is owned by American businessman Hugh Hefner.

Since “Korston Group” is well-known for running casinos beside its reputation in hotel management, its entering Montenegrin market indicates relocation of this highly profitable business from Russia. Owners of large casino chains, which will not be allowed to operate in Russia starting from 1st July, find countries in the Balkans most attractive for relocating their business.

The former President of Russia- Vladimir Putin proposed the ban on all casinos and gaming halls in the Russian Federation through the special law. Putin explained that gambling has harmful effects for the Russian society in general, as well as alcoholism.

This law comes into effect on 1st July 2009.

By M.M.