Uy inks debt-restructuring deal with Chinabank

MANILA, Philippines — PH Resorts Group Holdings Inc (PH Resorts), the listed tourism and gaming company of Davao-based tycoon Dennis Uy, has been given a new lease on life after signing a debt restructuring arrangement with Sy-led China Banking Corp. and finding a potential white knight for its $600 million Emerald Bay casino resort in Cebu.

PH Resorts signed a sale and leaseback agreement with Chinabank for the 12.-5 hectare land of the yet-to-be-completed Emerald Bay, the company said in a filing with the Philippine Stock Exchange yesterday.

Emerald Bay, originally envisioned to be the first integrated beachfront casino resort in Mactan, was supposed to open in 2022 but was stalled by the COVID-19 pandemic.

As a result, PH Resorts’ short term loans with Chinabank ballooned to roughly P6 billion as of June 30, according to the company’s latest quarterly report.

But the cash-strapped company continues to get back on its feet and has now found itself a potential white knight after it signed a Memorandum of Understanding (MoU) with AppleOne Properties Inc., a Cebu-based premier development company.

Under the MoU, AppleOne can invest in PH Resort’s subsidiaries with the intention of obtaining at least a majority of the equity interest or an asset purchase of the land and improvements of the Emerald Bay.

The parties will finalize the final investment and resulting percentage of ownership with negotiations expected to be completed within 60 days, based on the MoU.

Confirming the MoU, AppleOne president and CEO Ray Manigsaca told The STAR that the next steps would be the conduct of due diligence.

AppleOne, led by Ray and his wife Venus, is behind several projects in Cebu including Sheraton Cebu Mactan Resort and Mahi Center. It would soon build JW Marriott Panglao Island Resort & Spa, a five-star hotel in Panglao, Bohol.

It was founded 12 years ago when the husband and wife team decided to diversify their then 17-year-old construction company, VenRay, which focused on building roads and bridges.

Sheraton Cebu Mactan Resort is already operational and has been a favorite leisure destination among locals and foreigners alike while the development of Mahi Center is ongoing. It will have a business hotel also from global hotel brand Marriott International, Fairfield by Marriott Mactan, which will be the first in the country.

PH Resort’s restructuring agreement with Chinabank, meanwhile, allows the company to repay the peso bridge loan facility extended by Chinabank in 2018, which at the same time, grants them continued possession and use over the property in order to finish the construction and development of the Emerald Bay.

“In addition, the option to buyback of the restructuring allows the subsidiaries or its nominees to reacquire the properties, if so desired,” PH Resorts said in its disclosure.

PH Resorts reported a net loss of P1 billion in the first half of 2023, resulting in a deficit of P3.71 billion.

Last year, Enrique Razon’s Bloomberry Resorts Corp. planned to invest in Emerald Bay Resort Hotel and PH Resorts’ Base Resort Hotel and Casino in Clark in Pampanga but the Razon Group called off the deal following due diligence.