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GSIS takes up half of Resorts World P1.65-B share sale

By: Doris C. Dumlao, July 4th, 2013 12:19 PM

MANILA, Philippines—Leisure & Resorts World Corp. (LWRC) has raised P1.65 billion from the sale of preferred shares to selected investors, including the state-controlled pension fund Government Service Insurance System (GSIS) which accounted for half of the deal.

In a disclosure to the Philippine Stock Exchange on Thursday, the gaming company said it sold the preferred shares to 10 individual investors, including the GSIS, which invested P800 million and Philippine Commercial Capital Inc. which invested P200 million.

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

The GSIS, which earlier confirmed interest in investing in LWRC, said the 8.5 percent coupon rate was attractive and in line with its strategy to scout for investments that will improve its asset yield in this low-interest environment.

Aside from GSIS and PCCI, other existing investor groups participated in the preferred shares deal, particularly the Vantage group of businessman Eusebio Tanco and the Philequity fund management group.

These preferred shares are cumulative, non-voting and non-participating. For each 20 preferred shares, the holders are entitled to one warrant convertible to common shares starting on the fifth year. Each warrant, if exercised at a price of P15 or the average weighted trading price for the three months prior (whichever is lower) will be converted to one common share.

“The fresh funds will be used to primarily finance LRWC’s participation in the Belle Grande Integrated Resort and Casino project, the construction, renovation and capital expenditures for the Midas Hotel and Casino, the construction of the Techzone BPO building in Makati City, and the acquisition and roll-out of additional bingo sites, among others,” LWRC said.

Last May, LRWC’s wholly owned subsidiary, AB Leisure Global Inc., also raised P3 billion from a credit facility with Banco de Oro Unibank, which partially funded the P4 billion payment to Belle Corp. which the latter will in turn use for the Belle Grande Integrated Resort and Casino project.

As part of LRWC’s commitment to its preferred share investors, LRWC said it was working to secure the necessary approvals from the PSE for the listing of the shares and the warrants.

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