Philippine casino operator and developer Bloomberry Resorts Corp announced on Friday plans to conduct a share placing and subscription transaction in order to raise up to PHP5.59 billion (US$98.6 million).
No timeline was mentioned to complete the fund raising exercise. The firm said the operation was “subject generally to market conditions”.
Bloomberry operates the Solaire Resort and Casino property (pictured) in the Metro Manila region. The company is also developing a casino resort project in Vertis, at Quezon City, expected to open next year.
The firm said in a filing to the Philippine Stock Exchange that its board of directors had authorised “an equity fund raising through a placing and subscription transaction” involving its controlling shareholder, Quasar Holdings Inc. The latter is owned by Philippine billionaire Enrique Razon, who is also chairman and chief executive of Bloomberry.
The overall transaction will be separated in two parts. The first involves the sale by Quasar Holdings of up to 559 million of its shares in Bloomberry at an offer price of PHP10.00 per share, “to investors outside the United States” and “in the Philippines to qualified buyers in transactions that will not require registration under the Securities Regulation Code.”
The second part is to take place concurrently upon completion of the share sale by Quasar Holdings. It involves the issuance by Bloomberry to Quasar Holdings of new shares, “in the same number and at the same price as the shares sold” by the latter during the first part of the transaction.
In Friday’s filing, Bloomberry said an “equity fund raising by way of a placing and subscription transaction” would allow the firm to “raise equity funds in a most expeditious and efficient manner, with the least cost” to the company.
The casino operator stated that the transaction “intended to strengthen and broaden the capital base of Bloomberry, as well as to promote a wider dispersion of [its] shares to a broad spectrum of institutional investors.”
In a Friday memo, Morgan Stanley Asia Ltd said that, following the transaction, Mr Razon’s stake in Bloomberry would decrease from 65.5 percent to 62.3 percent. Morgan Stanley’s analysts Praveen Choudhary and Gareth Leung added that the deal would be “positive for share liquidity”.
“Bloomberry shares have… seen more demand after it was added back into PSEi index this week,” they stated.
Maybank IBG Research said in mid-September it had raised by 23 percent its 2023 earnings forecast for Bloomberry, as the firm’s net income for the first half of this year was “ahead” of market consensus. The institution also raised its 2024 earnings forecasts by 15 percent.
Bloomberry reported net income attributable to shareholders of just below PHP3.43 billion for the second quarter of 2023, up 15.1 percent from the preceding three months. Judged year-on-year, the figure was up 89.5 percent.
In the first six months of 2023, the casino operator posted net income of PHP6.42 billion, up 158 percent year-on-year.
