GGRAsia – CoD Manila local partner eyes stake in Melco Philippines

CoD Manila local partner eyes stake in Melco Philippines

May 18, 2018 Newsdesk Latest News, Philippines, Top of the deck

Asian casino investor Melco Resorts and Entertainment Ltd is in “preliminary discussions” that could lead to its Philippine partner at the City of Dreams Manila casino resort (pictured) taking an equity stake in the local Melco Resorts operating unit.

Melco Resorts’ Manila operating unit, locally-listed Melco Resorts and Entertainment (Philippines) Corp, stated in a filing to the Philippine Stock Exchange it had been notified of the talks by its parent company.

The potential deal would be between Melco Resorts, and Philippine firm Premium Leisure Corp, “whereby Premium Leisure Corp or its affiliated entities may become equity holders of Melco Resorts Philippines,” said the announcement on Friday.

Premium Leisure Corp is a unit of Belle Corp, which is the landlord of the City of Dreams Manila site.

Affiliated entities of Premium Leisure Corp have an operating agreement with an entity called Melco Resorts Leisure (PHP) Corp, the subsidiary of Melco Resorts Philippines which operates the casino business of City of Dreams Manila. Under the arrangement, Premium Leisure Corp is entitled to whichever of the following is the greater: either 50 percent of Melco Resorts Philippines’ gaming earnings before interest, taxation, depreciation and amortisation (EBITDA) after deducting a 7-percent incentive fee paid to Melco Resorts; or 15 percent of net win in the mass-market segment plus 5 percent of net win in the VIP segment.

In late April Belle Corp reiterated a 2017 proposal to expand City of Dreams Manila. According to local media reports in April, a one-hectare (2.5-acre) plot next to City of Dreams Manila and held by Belle Corp would be used mainly to create new non-gaming facilities, including hotel accommodation.

Manuel Gana, president of Belle Corp, was quoted as saying at the time that were the casino firm to decline involvement in expansion, Belle Corp would be “free to do something else.”