LRWC buying 50% of Midas Hotel owner for P800M

MANILA, Philippines - Bingo operator Leisure & Resorts World Corp. (LRWC) is acquiring 50 percent of a company that owns the Midas Hotel and Casino along Roxas Blvd. for around P800 million.

In a disclosure to the Philippine Stock Exchange, LRWC said it inked a preliminary agreement with businessman Zaldy Co’s Ecco Leisure & Hospitality Holding Co. to purchase 50 percent of the outstanding capital of Hotel Enterprises Inc., operator of the 240-room Midas Hotel (formerly Hyatt Regency) for an undisclosed amount.

Sources, however, said the price tag for the acquisition would hover around P800 million.

Other sources said it was Chinese-Filipino businessman Lucio Co who sold his shares in Midas as he goes full blast on energy-related projects.

The transaction, when completed, will give LRWC a direct hand in the casino gaming and hospitality business, which is touted to be the next big thing in the country given an emerging middle class.

Midas Hotel offers deluxe service and five-star amenities.

LRWC is investing about P4 billion in a $1-billion integrated casino and resort complex within the 100-hectare Entertainment City alongside Belle Corp. and Macau casino giant Melco Crown Entertainment Ltd.

In exchange for its investment, LRWC wholly-owned unit AB Leisure Global Inc. shall be  entitled to 30 percent of the fixed yearly income generated from the leasing of all commercial space in the project, inclusive of the hotel, retail and casino premises.

Aside from this, AB Leisure shall be paid fees equivalent to a 30 percent of Belle’s 50 percent share of the EBITDA (earnings before interest, taxes, depreciation and amortization) from casino operations or 30 percent of Belle’s 15 percent share of the net win, whichever is higher, after deducting Belle’s royalty which is based on gross win.

Upbeat on the growth prospects of its core business, LRWC is increasing the number of its bingo machines to 4,000 by yearend  from a little over 3,000 at the end of December 2011.

AB Leisure Exponent Inc. is the market leader in commercial bingo operations.

It expects subsidiary First Cagayan Leisure & Resort Corp. to continue its growth trajectory this year on the back of higher application and listing fees and rental income.  The company is the only master licensor for e-gaming jurisdiction in the region, providing state-of-the-art facilities at the Cagayan Special Economic  Zone & Freeport (CSEZFP).

As of Dec. 31, 2011, First Cagayan had 60 licensed locators, 52 of which are operational.

First Cagayan Converge Data Center, a unit of FCLRC, has seen recovery in its operations, posting a 25 percent growth.  It provides telecommunications, connectivity, co-location and technical services to all gaming licensees at the CSEZFP.