PH Resorts Group Holdings Inc, promoter of Emerald Bay, an under-construction casino resort in Cebu, in the Philippines, saw its total comprehensive loss widen by about a third, to PHP175.5 million (US$3.5 million) for the six months to June 30, from PHP134.4 million in the prior-year period.
That was “primarily due to ongoing construction activities at Emerald Bay”, said the firm.
According to a Monday filing to the Philippine Stock Exchange, the first phase of Emerald Bay is due to be completed “in the third quarter 2022”, the same date the firm mentioned in a May announcement.
According to the latest results, the group’s liabilities exceeded its assets by nearly PHP7.29 billion as of June 30.
“These conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern,” noted the filing.
PH Resorts is pledged to spend, via an affiliate, a minimum of US$300 million on the Emerald Bay scheme, as part of its deal with the country’s casino regulator, the Philippine Amusement and Gaming Corp, for a provisional gaming licence.
A PH Resorts’ subsidiary – Clark Grand Leisure Corp – is required to invest a minimum of US$200 million in an “integrated tourism resort” with casino in Clark Global City, on the main island of Luzon, as a condition of getting a Pagcor provisional licence there.
The latter scheme is currently “in the design phase,” said Monday’s filing.
PH Resorts noted in the quarterly report it had “ongoing negotiations” with its lenders for the conversion of a bridge loan to a long-term project loan, the possibility of an additional long-term loan, deferral of principal and interest payments, and “testing of a subsidiary’s debt-to-equity ratio”.
The company further stated: “Management believes that considering the progress of the steps undertaken to date, these financing and capital raising plans are feasible and will generate sufficient cash flows to enable the group to meet its obligations when they fall due and address the group’s liquidity requirements to support its operations and the completion of its projects.”
The filing reiterated that in November last year PH Resorts successfully conducted a follow-on equity offering of 450.0 million primary common shares, inclusive of an overallotment offer, with the issue more than 2.5 times oversubscribed, according to the underwriters.
The offer was priced at PHP1.68 per share, and the shares were listed on the Philippine Stock Exchange on November 5. PH Resorts received PHP756.0 million in gross proceeds from the offer.
