GGRAsia – Suntrust investors to add US$346mln to Manila project

Suntrust investors to add US$346mln to Manila project

Jun 12, 2023 Newsdesk Latest News, Philippines, Top of the deck

Investors linked to Suntrust Resort Holdings Inc, the developer of a casino scheme in the Philippines’ capital Manila, will have to inject an additional PHP19.37 billion (US$345.6 million) as cash equity into the project, as part of conditions in a fresh loan facility. That is according to a Monday filing from Hong Kong-listed Summit Ascent Holdings Ltd.

Suntrust is indirectly owned by LET Group Holdings Ltd, a Hong Kong-listed company. LET Group is also the controlling shareholder of Summit Ascent, the latter firm an investor in the Tigre de Cristal casino resort, near the Russian Pacific port of Vladivostok.

Last week Suntrust said it was to negotiate a loan of up to PHP25.00 billion with China Banking Corp, a Philippines-based privately-owned commercial bank.

Philippines-listed Suntrust is developing a casino hotel complex (pictured in an artist’s rendering) as part of the Westside City project. It is to feature 460 five-star rooms, and a casino establishment that “would cater to both mass and VIP markets,” according to information previously disclosed by the firm.

The project had been described as having a price tag of approximately US$1 billion.

Although Summit Ascent’s filing reiterated 2024 as the year for the casino hotel project to “commence operations”, the document stated that funds from the fresh loan will continue to be drawn down through to October 2025.

As part of the schedule detailed in the filing, a fourth drawdown – for PHP7.52 billion – is to occur in April 2025.

To access those funds, additional cash equity “in an amount equivalent to at least PHP7.87 billion” will have to be injected by investors linked to Suntrust. Those include Summit Ascent Investments Ltd, a unit of Summit Ascent; Andrew Lo Kai Bong, who chairs LET Group, Summit Ascent, and Suntrust; and Fortune Noble Ltd, a wholly-owned subsidiary of LET Group.

Other conditions to achieve the April 2025 deadline include: providing a certificate to the lender confirming that the podium fit-out for the casino hotel complex had been completed, that the proper partial occupancy permit for the scheme had been issued, that the project had achieved “at least 85-percent construction completion”, and that the relevant authority in the Philippines had “issued a notice to commence casino operation”.

The fifth and last tranche – totalling PHP6.48 billion – would be available in October 2025. It would require an additional cash equity of PHP11.50 billion by Fortune Noble, Mr Lo, and Summit Ascent Investments. The lender would also have to receive a confirmation that the fit-out process for the hotel had “been completed”.

In its Monday filing, Summit Ascent also said Summit Ascent Investments shall provide further financial support to Suntrust, as part of the loan agreement.

These include a “first charge and assignment by way of security [to the lender] of all present and future convertible bonds issued by Suntrust to Summit Ascent Investments,” as well as of all shares in Suntrust currently held or that in the future may be held by Summit Ascent Investments.

Summit Ascent Investments will also have to provide support to Suntrust “to ensure timely completion” of the casino hotel project; and in a “timely” manner, “fund the cost overruns” of the project.

“Facilitating the completion and opening of the main hotel casino is essential to the group in securing a return on its investment,” stated Summit Ascent on Monday. “The financial assistance helps in the obtaining of the loan facility by Suntrust … required for the development and completion” of the project, it added.