By Neil Jerome Morales
(The Philippine Star) | Updated September 14, 2013 - 12:00am
MANILA, Philippines -
Razon-led Bloomberry Resorts Corp., the owner of the $1.2-billion Solaire
Resort and Casino, has sacked its casino manager and a key executive for breach
of contract.
The management shakeup
came just six months since the opening of the casino complex, whose revenues
have yet to catch up with high operating expenses.
Bloomberry and its
operating subsidiaries Sureste Properties Inc. and Bloomberry Resorts and
Hotels Inc. said they “have terminated the management service agreement (MSA)
with Global Gaming Philippines LLC (GGAM) because of material breach of the MSA
by GGAM.”
“GGAM has not spent any
material time in attending to the management of Solaire and has failed to
perform its obligations and deliveries under the MSA,” Bloomberry said in a
disclosure.
Bloomberry said it is
eyeing an experienced casino hotel executive to replace Solaire chief operating
officer Michael French, the official representative of GGAM.
Following the shakeup,
Bloomberry said Solaire will be operated by several members of the existing
management team “that are very capable.”
For its part, GGAM said
it did not violate the agreement with Bloomberry.
“Bloomberry’s assertions
regarding GGAM’s performance of its obligations under the MSA have no factual
or legal validity,” the casino manager said in a statement.
“Bloomberry has
materially breached that agreement and GGAM is pursuing its rights under that
contract in arbitration in Singapore,” it added.
GGAM is led by three
principals who each have decades of integrated tourism resort and gaming
industry experience, a substantial portion of which were in senior management
positions with Las Vegas Sands in the US and Macau.
Late last year, GGAM
exercised its option to acquire 921.18 million Bloomberry shares at a sharp
discount. The purchase of an 8.7-percent stake, which allowed GGAM to become
the second-biggest shareholder of Solaire, aligned the interest of GGAM with
those of the owners of Solaire.
The $750-million Phase 1
of Solaire, which offers 500-rooms, 18,500 square meters of gaming space and 15
luxurious dining options, started commercial operations on Mar. 16.
For the first half,
Bloomberry posted a net loss of P1.03 billion, deeper than the P260-million
loss in the same period last year.
In the second quarter,
Bloomberry recorded P22.7 million in profits on the back of P3.59 billion in
revenues. However, revenues have yet to catch up with high operating expenses,
which hit P3.65 billion in the second quarter.
Bloomberry is spending
$450 million for the Phase 1A expansion that will allow the company to open a
300 all-suite hotel, 3,900 parking slots, a shopping center with luxury brand
stores and an entertainment theater by next year.
The casino hotel is
situated in Entertainment City, a 120-hectare property reclaimed from Manila
Bay and owned by the Philippine Amusement and Gaming Corp. (Pagcor).
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