GGRAsia – Universal places US$600mln in debt to fund Okada Manila

Universal places US$600mln in debt to fund Okada Manila

Dec 10, 2018 Newsdesk Latest News, Philippines, Top of the deck

Japanese gaming company Universal Entertainment Corp says it has completed a private placement of notes worth US$600 million that will help pay for the construction of the Okada Manila casino resort in the Philippines.

The property (pictured) in the Philippine capital had a soft launch in December 2016. It subsequently opened a number of additional facilities in stages.

Universal Entertainment told the Jasdaq that it had completed the placement on Thursday. The company expects to issue the notes on Tuesday. The issue price is 99 percent of the principal amount. The debt will mature on December 11, 2021, with an annual coupon of 8.5 percent. Union Gaming Securities handled the deal.

The company said it would use the net proceeds to defray the construction of the Okada Manila; to repay borrowing by a subsidiary, Tiger Resort Asia Ltd, which runs the casino resort; and for general corporate purposes.

Universal Entertainment said this month it had yet to begin a share buy-back it announced in October. The company had said it would buy 600,000 shares of common stock – about 0.75 percent of its outstanding shares, excluding treasury stock – for JPY2 billion (about US$17.6 million) between October 15 and December 28 this year.

Universal Entertainment is engaged in a multifaceted, public dispute with its founder and former boss, Japanese gaming magnate Kazuo Okada, who is attempting to regain control of the company.

Universal Entertainment said in a Monday filing to Jasdaq that in November Okada Manila posted gross gaming revenue of PHP2.91 billion (US$55.1 million) and adjusted segment earnings before interest, taxation, depreciation and amortisation (EBITDA) of PHP527.8 million.

Those indicators were a “record high respectively,” added the group.

It stated that November GGR – judged sequentially – was up 9 percent, and adjusted segment EBITDA up 42 percent.

November profit after depreciation and amortisation “became positive,” added the filing, stating that the month’s GGR increase was helped by higher win rates in VIP and mass-market table games.

The upped GGR was “also associated with additional revenue contribution by new contracted junkets in VIP table games within this quarter (October to December 2018) and mass marketing initiatives which continuously drove the foot traffic in the mass market,” added the company.

(Updated 9.40am, Dec 11)