Philippine casino resort investor PH Resorts Group Holdings Inc says two subsidiaries have signed a non-exclusive, non-binding memorandum of understanding (MoU) with Cebu-based property developer AppleOne Properties Inc.
It is with a view to AppleOne either obtaining “at least a majority of the equity interest in the subsidiaries, or an asset purchase of the land and improvements of the Emerald Bay project,” an unfinished casino complex (pictured in a file photo).
The PH Resorts units are Lapulapu Leisure Inc and Lapulapu Land Corp. Lapulapu Leisure has been developing the Emerald Bay Resort Hotel and Casino in Punta Engano, Lapu-Lapu City, Cebu.
PH Resorts said in its Monday filing to the Philippine Stock Exchange, that the consideration for the AppleOne investment and resulting percentage of ownership “are still subject to final negotiations by the parties, which are expected to be completed within 60 days, based on the memorandum of understanding”.
The announcement did not clarify if the AppleOne investment was with a view to continuing Emerald Bay as a casino scheme.
The Monday filing noted in relation to the overall proposed deal with AppleOne: “PH Resorts will make the necessary disclosures at the appropriate time when the deal terms are finalised and the definitive agreements are signed”.
PH Resorts also stated that Lapulapu Leisure and Lapulapu Land had been “able to successfully restructure their existing outstanding indebtedness with China Banking Corp,” a Philippine lender also known as Chinabank.
This was via “the execution of agreements for the sale, leaseback, with option to buy back certain land and improvements of the subsidiaries”.
PH Resorts added: “This restructuring covers the property of the subsidiaries in Lapulapu City, Mactan, Cebu, with an area of approximately 12.5 hectares [30.9 acres], plus improvements.”
PH Resorts also noted that the restructuring allows the subsidiaries to repay a peso bridge loan facility extended by Chinabank in 2018, and at the same time, grants the subsidiaries “continued possession and use over the property in order to finish the construction and development of the Emerald Bay project.
“In addition, the option to buy back… allows the subsidiaries or its nominees to re-acquire the properties, if so desired,” stated PH Resorts regarding the restructuring of the arrangements with Chinabank.
In its results for the quarter to June 30, issued in August, PH Resorts said it was “recasting its construction timetables and the opening date of the first phase” of Emerald Bay.
“Current construction activity is minimal on a deliberate basis due to potential changes in specifications,” it added at the time.
PH Resorts’ second-quarter loss ballooned to nearly PHP868.4 million (US$15.3 million), compared to a loss of PHP212.3 million in the first quarter.
It reiterated in its second-quarter filing that “material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern and, therefore, that the group may not be able to realise its assets and discharge its liabilities in the normal course of business”.
In March, Philippine casino resort operator Bloomberry Resorts Corp said it had terminated an initially non-binding agreement – known as a term sheet – to invest in a unit of PH Resorts developing two gaming resorts in respectively Cebu and Clark.
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