Discovery World pushes through with P1-B IPO

MANILA, Philippines - The company behind upscale resort hotel Discovery Shores Boracay is pushing through with its P1-billion initial public offering (IPO) late next month.

In a memorandum, the Philippine Stock Exchange (PSE) said it “approved the application of Discovery World Corp. for the initial listing of 764 million common shares.”

Discovery World plans to sell 306 million common shares at P3.28 apiece to generate P1.003 billion in fresh capital. The shares to be sold represent 40.05 percent of the issued and outstanding common shares of Discovery World.

Offer period will run from Aug. 12 to 19, which will be followed by the listing in the PSE on Aug. 29. The new schedule is roughly a month behind the original plan as the market  encountered volatility last month.

Discovery World, the third company of the Tiu family to be listed in the PSE, tapped Abacus Capital & Investment Corp. as  issue manager and underwriter. The Tiu family owns i-Remit Inc. and TKC Steel Corp.

Early this month, Discovery World secured the Securities and Exchange Commission’s approval to raise fresh capital from the local stock market.

“The net proceeds from the offer will be used for investments in new businesses, debt retirement and working capital purposes,” Discovery World said.

Specifically, P575 million will be spent to develop a resort hotel in Palawan, refurbish boats for its cruise business and buy more shares in culinary, hotel and restaurant, and business administration institution Enderun Colleges.

The resort owner will also retire its P325-million debt while allotting P55 million for working capital.

The company operates Discovery Shores Boracay that started commercial operations in 2007. The resort has been awarded the No. 1 Hotel Spa in Asia, Top Family Hotel in Asia, No. 2 Top Resort in Asia and No. 5 Top Resort in the World in 2012.                                  

Discovery World also operates under the brands Discovery Boracay, Discovery Shores, Platitos Resto-Bar, Sands Lounge, Indogo Resto-bar and Sunken Pool Bar.

In the first quarter, Discovery World more than doubled the profit to P14.15 million from P6.65 million a year ago. Revenues inched up to P111.54 million from P107.62 million as weaker food and beverage sales offset the improved performance of room services.

Its major shareholders are JKTC Equities Inc. (66.07 percent) and The Discovery Leisure Co. Inc. (33.93 percent).

JKTC is the Tiu family’s investment holding firm, which has  investments in Hong Kong, Singapore, Taiwan, China, Australia, New Zealand and Canada. The Discovery Leisure, for its part, manages the Discovery hotel and resort properties in the Philippines.

Three firms have so far debuted in the local bourse: Philippine Business Bank, Asia United Bank and Del Monte Pacific Ltd. A microfinance firm, AG Finance Inc., is set to list in the PSE on Aug. 13.

On the other hand, volatile swings in the local bourse last month prompted tugboat operator Harbor Star Shipping Services Inc., Gokongwei-led Robinsons Retail Holdings Inc. and Travellers Hotel Group Inc. to defer their  respective IPO.