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

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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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  • randyaltarejos

    Has GSIS members been consulted on this type of investment in casino?

  • kilabot

    the previous gsis invested taxpayer money in expensive work of arts;
    the current gsis invests in gambling;
    organized crime syndicate does both.

  • jamie

    Please don’t mislead. Your title seems to be misleading, specially if people don’t go on to continue reading the article in full. Resorts World and LWRC are two different entities.

  • OFW_Investor

    GSIS is betting a lot on the success of BEL to operate its gaming complex profitably of which LWRC is the minority partner .

  • jpastor

    I wonder who makes the decision and approval for GSIS to invest public funds. Normally the chief negotiator would make a haul of benefits in putting a large investments to a company. The govt must look deeper into this transaction.

  • OFW_Investor

    The market is so liquid that LWRC did not bother to offer the preferred shares to the public.

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