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GSIS buys shares in casino operator

By Jenniffer B. Austria | Posted on Jul. 05, 2013 at 12:02am |
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State-run pension fund Government Service Insurance System has invested P800 million in Leisure & Resorts World Corp., which is building a new casino in Parañaque City.
Leisure & Resorts World said Thursday it raised P1.65 billion from the sale of preferred shares to investors, including GSIS.
The casino operator said in a disclosure to the stock exchange the GSIS subscribed to P800 million worth of preferred shares, while Philippine Commercial Capital Inc. bought P200 million.
The preferred shares have a coupon rate of 8.5 percent annually and are to be paid semi-annually.
Leisure & Resorts World  said the shares were cumulative, non-voting and non-participating.
The company said subscribers to the preferred shares would be entitled to 1 warrant share for every 20 preferred shares acquired. Each warrant, if exercised at a price of P15, or the average weighted trading price for the three months prior (whichever is lower), will be converted into one common share.
The option will be exercisable starting in the fifth year.
Leisure & Resorts said it would use proceeds from the sale of preferred shares to finance its participation in the Belle Grande Integrated Resort and Casino project, the construction, renovation and capital expenditures of the Midas Hotel and Casino, the construction of the Techzone BPO building in Makati City, and the acquisition and rollout of additional bingo sites.
The company’s wholly-owned unit AB Leisure Global Inc. signed a P3-billion loan agreement with BDO Unibank Inc. in May.
The amount partially funded the P4-billion payment to Belle Corp., which it would use for the Belle Grande Integrated Resort and Casino project that is expected to open by July next year.
AB Leisure has economic interest in the casino project, which entitles it 30 percent of the fixed yearly income generated from the lease of all commercial spaces in the casino project. These spaces include hotel, retail, and casino premises.
AB Leisure will be paid fees equivalent to 30 percent of the 50-percent share of Premium Leisure and Amusement Inc. from the casino operations, or 30 percent of PLAI’s 15-percent share of net wins.
PLAI is a wholly-owned subsidiary of Belle Corp., which has obtained a license from state-run Philippine Amusement and Gaming Corp. to operate an integrated resort and casino project in the Pagcor Entertainment City complex.
The $1.2-billion Belle Grande is located on a 6.2-hectare property with a gross floor area of 300,000 square meters.
The project will contain 20,000 square meters of gaming space, six hotel towers with a total of 950 rooms and a number of high-end bars and restaurants.

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