By Zinnia B. Dela Peña
Thursday, October 23, 2008 [ philstar.com ]
Clark Development Corp. (CDC) has declared the bidding for the 215-hectare Mimosa Leisure Estate in Clark, Pampanga a failure after Gatchalian-owned hotel operator Waterfront Philippines Inc. defaulted on its financial obligations.
In a disclosure to the Philippine Stock Exchange, Waterfront said it received Tuesday afternoon a notice from CDC concerning its decision “to cancel the bidding process of Mimosa because of a supervening event that materially affected the terms of the project.”
This after the board of CDC shot down Waterfront’s request to extend the deadline for compliance with its financial commitment as stipulated in the memorandum of understanding which expired on Oct. 11. Waterfront was originally given 90 days to pay P872.5 million but it failed to come up with the money for the payment.
The financial deliverables include an upfront payment of P450 million for the going concern value (GCV), advance minimum guaranteed lease of P160 million, and another P160 million for the security deposit, the performance security equivalent to five percent of P50 million of the total investment commitment and the balance of P52.5 million for GCV.
Earlier reports said Mimosa was in talks with a Korean investor to help fund its obligation to CDC.
CDC president Benigno N. Ricafort said the cancellation of the lease/management contract of the Mimosa Estate to Waterfront was based on the premise of a new condition on the issuance of a casino license by the Philippine Amusement and Gaming Corp. (Pagcor).
Pagcor wants Waterfront to first pay the arrears of Mimosa’s previous operator, which the Gatchalian-led firm claimed would put the financial viability of the whole project in jeopardy.
Waterfront requested for a 60-day extension of the deadline, “or until such time that a legal and binding solution can be worked out with all affected parties,” particularly on the matter of a gaming license from the Pagcor.
“The heart of the estate’s operations lies in the gaming industry, and without clear right to obtain a license that has equal footing on a level playing field with other licenses, the financial viability of the whole project is greatly imperiled,” Waterfront pointed out.
“This is inconsistent with our issuance in this bidding and previous representations by Pagcor to CDC, and constitutes a supervening event that materially affected the terms of this project,” Ricafort said.
For the fourth time since 2003, the bidding for the Mimosa Estate was declared a failure.
In 1998, CDC took control of the management and operations of the Mimosa Estate after its former owner Mondragon Leisure & Resorts Corp. failed to pay lease rentals amounting to around P460 million.
The Mimosa Estate, which lies within the 4,400-hectare former US military facility, is composed of a 38-hole golf course, a clubhouse, a hotel, a casino, and a restaurant. — With Ric Sapnu
