Discovery revives IPO plan

Boracay resort developer Discovery World Corp. (DWC) has revived its bid to debut on the local stock exchange but revised its prospectus to cut the offering size and factor in a new opportunity to acquire Club Paradise Resort in Coron, Palawan.

DWC, developer of upscale beachfront resort Discovery Shores Boracay, is now planning to sell only up to 168 million primary common shares for about P551.04 million, down from the original size of 306 million shares worth about P1 billion.

However, the maximum price per share was kept at P3.28, based on the firm’s revised IPO prospectus obtained by Inquirer.

“We just amended the registration statement. So we’re awaiting SEC (Securities and Exchange Commission) processing,” said one source privy to the offering.

The source said DWC had also changed the planned use of the IPO proceed, which was originally set for August but was deferred due to volatile market conditions.

Based on DWC’s revised prospectus, a portion of the IPO proceeds previously earmarked for repayment of bank debt for “proof of payment” of P125 million will be used to retire bank debt for “purchase of property,” in light of an  opportunity to acquire Euro-Pacific Resorts Inc. (Euro-Pacific), owner and operator of Club Paradise Resort in Dimakya Island, Coron, Palawan.

Club Paradise is a popular resort that caters to both local and foreign tourists who are in the same market segment that Discovery Shores Boracay serves.

DWC is in the process of finalizing the purchase agreement to consummate the acquisition, the revised term sheet showed.

DWC also decided to delay the development works for the proposed resort in San Vicente, Palawan, owned by Palawan Cove Corp. to a later date to enable the company to “dedicate its resources and capital for the acquisition and refurbishment of Club Paradise.”

It is also dropping earlier plans to acquire a 20-percent interest in hotel and restaurant management school Enderun Colleges Inc. for P250 million.

Meanwhile, DWC is still keen on investing P100 million in cruise operator Discovery Fleet Corp., which operates one cruise boat with about 50 rooms, offering diving and non-diving programs.

DWC is 66.07 percent owned by JKTC Equities Inc., the investment holding firm of the Tiu family and 33.93 percent by The Discovery Leisure Co. Inc., the company managing Discovery Shores Boracay.

The issue manager and underwriter for the offering is Abacus Capital & Investment Corp.