Japan’s Universal Entertainment Corp says it has concluded a private placement of notes valued at US$400 million in order to “complete the construction of Okada Manila”, a casino resort in Manila, the capital of the Philippines.
The announcement from the Jasdaq-listed group was originally issued in Japanese on Wednesday, with a summary appearing online in English later.
The placement, through Deutsche Securities Inc, is related to a private placement of US$600 million in notes with five-year maturity announced in August 2015. The proceeds of that earlier exercise were for repayment of existing short-term debt, and payment for construction and development of the Manila casino resort.
It is expected that the new notes will be issued on October 14. They have a maturity date of August 24, 2020; and offer a yield of 8.5 percent per annum, “with any interest in excess of 6 percent payable, at the option of the company, by adding additional principal”.
“With the issuance of these… notes, the company will have successfully secured a significant majority of the construction costs for the opening of Okada Manila,” Universal Entertainment stated.
The announcement said security on the notes included a 100 percent pledge on shares of Aruze USA Inc. The corporate website of Universal Entertainment, a conglomerate founded by Japanese pachinko entrepreneur Kazuo Okada (pictured), describes Aruze USA as a consolidated subsidiary of the group.
The new notes are also backed via “security over one or more accounts of the company or its subsidiaries”. The announcement added “all proceeds from the issuance of the notes will be held in secured accounts until drawn for permitted uses”.
Tiger Resort, Leisure and Entertainment Inc, a firm controlled by Mr Okada that is promoting the Okada Manila project, said in an email to GGRAsia in May last year that as of that date it had committed approximately US$750 million to the Manila Bay Resorts project, with a further US$1 billion pending.
Under an earlier plan for Okada Manila – originally slated as a US$2.3-billion venture under the working title Manila Bay Resorts – the casino property should have been completed by March 31, 2015. But the country’s regulator, the Philippine Amusement and Gaming Corp (Pagcor), approved in June 2015 a new timetable that pushed back the completion of the venue to December 31, 2016.
In July a senior executive of Tiger Resort was quoted saying the site would open “before the end of the year”.
But in an announcement on Monday this week, Universal Entertainment hinted there might be a delay to the opening of Okada Manila.
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”After 2016 or 2017, there will be a seven to eight-year period without new properties [casino-resorts]”
Chief executive of Wynn Resorts and Wynn Macau