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Court halts sale of Bloomberry stake

Posted on January 20, 2014 11:37:06 PM [ BusinessWorld Online ]
BLOOMBERRY Resorts Corp. has secured a court order stopping a stake sale by its former management partner, the Philippine Stock Exchange (PSE) yesterday said.

The gaming firm, which owns and operates Solaire Resort & Casino at the Bagong Nayong Pilipino Entertainment City in Parañaque City, last Friday said subsidiaries Bloomberry Resorts and Hotels, Inc. (BRHI) and Sureste Properties, Inc., as well as controlling shareholder Prime Metroline Holdings, Inc., had asked a Makati court for a temporary order of protection to prevent the sale of its shares by Global Gaming Philippines (GGAM).

GGAM, the local unit of Las Vegas-based Global Gaming Asset Management; Deutsche Regis Partners, Inc., the brokerage that forms part of the Deutsche Bank Group in the Philippines; the PSE; and “John Does” were named as respondents.

“Please be advised that, at 10:48 A.M. today, the Exchange received an order in the case ... pending before Branch 66 of the Regional Trial Court of Makati City restraining the deposition of 921,184,056 shares of Bloomberry Resorts Corp. owned by Global Gaming Philippines LLC for a 20-day period effective immediately,” the bourse said in a notice.

The bourse last Jan. 16 suspended, upon Bloomberry’s request, trading in the gaming firm’s shares to prevent GGAM from selling its stake in the company. The suspension, which was supposed to end Jan. 24, was lifted last Friday, Jan. 17, for still undisclosed reasons.

Bloomberry noted that GGAM, in a Jan. 16 letter to the PSE, announced that it contracted the sale with “approximately 50 institutional investors” a day earlier and was poised to complete the deal via cross transaction through the bourse.

Neither Bloomberry nor GGAM specified a share price. Bloomberry shares closed yesterday at P8.80 apiece, two centavos or 0.23% up from Friday.

“These GGAM shares are the subject of the counterclaim of BRHI and Sureste against GGAM” in an arbitration case, Bloomberry said.

“[I]f the sale of shares is completed, petitioners will not be able to get back the shares and they will not be able to satisfy any judgment for damages that they may be able to obtain against GGAM in their ongoing arbitration proceedings on the termination of their MSA (management service agreement)...”

Bloomberry last Sept. 13 announced that BRHI and Sureste had terminated their management deal with GGAM, effective the following day, for alleged “material breach” of contract.

“GGAM has not spent any material time in attending to the management of Solaire and has failed to perform its obligations and deliverables under the MSA,” Bloomberry claimed.

GGAM promptly countered that “Bloomberry has materially breached that agreement and GGAM is pursuing its rights under that contact in arbitration in Singapore.”

The MSA was signed in 2012.

Opened last March, Solaire is the first of four integrated casino facilities to be located in the Philippine Amusement and Gaming Corp.’s eight square-kilometer Entertainment City. The others are Melco Crown (Philippines) Resorts Corp.’s City of Dreams Manila, scheduled to open this June; Tiger Resorts and Entertainment, Inc.’s The Manila Bay Resorts set to open next year; and Westin Starwood Hotels & Resorts’ Resorts World Bayshore that is scheduled to start operations in 2016.

Bloomberry last November reported that its net loss had more than doubled to P868.386 million as of September, with expenses for the start of Solaire’s operations having eroded its bottom line.

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