Leisure & Resorts World raises P1.65 B from preferred shares

MANILA, Philippines - Hotel and recreation firm Leisure & Resorts World Corp. (LRWC) has raised P1.65 billion through the sale of preferred shares, generating fresh capital to partially fund the construction of a $1.3-billion megacasino in Parañaque.

The share sale, conducted just a few weeks since the local stock market suffered from volatile swings, will also support the companay’s gaming and office ventures.

In a disclosure, LRWC said state pension fund Government Service Insurance System (GSIS) invested P800 million while investment house Philippine Commercial Capital Inc. bought P200 million of the preferred shares.

The preferred shares carry a coupon rate of 8.5 percent per annum and are paid semi-annually.

LRWC said every 20 preferred shares entitle an investor to one warrant that is convertible to one common share.

Each warrant can be exercised on the fifth year at P15 each or the average weighted trading price for the past three months, whichever is lower.

In January, LRWC announced a P200-million stock dividend and a plan to raise P1.75 billion through preferred shares.

“The fresh funds will be used to primarily finance LRWC’s participation in the Belle Grande integrated resort and casino project,” the company said.

The proceeds will also bankroll the construction, renovation and capital expenditures for the Midas Hotel and Casino, the construction of the Techzone office building in Makati City, and the acquisition and roll-out of additional bingo sites, it added.

The Techzone project will offer more than 75,000 square meters (sqm) of gross floor area. Of the total area, 42,000 sqm. will be allotted for commercial office space.

For the gaming business, LRWC subsidiary AB Leisure Global Inc. is entitled to 30 percent of the fixed yearly income generated from the lease of all commercial spaces in Belle Grande. It will also earn from casino operations.

LRWC partnered with Belle Corp., the leisure development firm of mall and banking tycoon Henry Sy, for the casino project within the 100-hectare Entertainment City.

Casino giant Melco Crown Entertainment Ltd. will manage the integrated casino project, which marks Melco’s first foray outside Macau.

Belle Grande will be the second complex to open in the area groomed to become the Philippines’ version of the Las Vegas strip, next to port mogul Enrique Razon’s $1.2-billion Solaire Casino & Resort that started operations in March.