The chairman and chief executive of Philippines casino operator Bloomberry Resorts Corp, Enrique Razon, said on Thursday that the sale of the Jeju Sun Hotel and Casino (pictured) – on Jeju Island in South Korea – to junket investor Iao Kun Group Holding Co Ltd would not take place.
“We had a sale already done but it fell through,” said Mr Razon, as quoted by the Philippine Daily Inquirer newspaper. He reportedly added that the buyer did not have enough funds to complete the deal.
Bloomberry had announced in June that Iao Kun planned to acquire the Jeju venue for a total consideration of KRW117.5 billion (US$101 million). The Philippine company said at the time that there was an expectation the deal would be closed within 45 days of the June 23 announcement.
A representative of Nasdaq-listed Iao Kun had said in September that the firm and Bloomberry had agreed to extend the required closing dates for the acquisition of Jeju Sun. Bloomberry however refuted the claim a few days later.
In September, during a conference call following Iao Kun’s second quarter results, the firm’s management said it was trying to find alternatives to finance the acquisition of Jeju Sun. The management said it wanted to complete the deal through debt financing because issuing equity was “off the table”.
Iao Kun in September was granted a six-month grace period to become once again compliant with the minimum bid price of US$1.00-per-share necessary for its listing in Nasdaq.
Since the second quarter reporting period, Iao Kun-related junket operations have been halted at three Macau VIP rooms: one at Sands Cotai Central, a property of Sands China Ltd; and one each at respectively, Galaxy Macau and StarWorld Hotel, properties of Galaxy Entertainment Group Ltd.
The moves coincided with what Lam Man Pou, chairman of Iao Kun, has described as “a strategic review of our operations to reduce expenses and continue to preserve our capital”.
On Thursday, Mr Razon said Bloomberry was “not in a hurry” to look for new buyers for Jeju Sun, as business was slowly starting to ramp up, reported the Inquirer.
Bloomberry said in a November filing that it continued to operate Jeju Sun, after Iao Kun “failed to raise the funding necessary to consummate the sale”.
Jeju Sun reported gross gaming revenue of PHP28.2 million (US$566,699) for the third quarter of 2016. Non-gaming revenue (excluding interest income) amounted to PHP55.4 million in the period.
Bloomberry reported net profit of approximately PHP1.41 billion for the three months ended September 30, compared to a loss of PHP187.4 million in the prior-year period.
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”We would like to thank Pagcor for their vote of confidence in granting Galaxy Entertainment a provisional gaming licence in the Philippines and the opportunity to strategically expand our brand into overseas markets”
Deputy chairman of Galaxy Entertainment Group