Leisure & Resorts World Corp. raising P250 M to buy Binondo hotel-casino

MANILA—The Securities and Exchange Commission has approved Leisure & Resorts World Corp.’s plan to raise P250 million from an offering of preferred shares sweetened with warrants, partly to fund the acquisition of a hotel-casino building in Binondo.

Part of the proceeds will pay for the acquisition of the 79-room three-star Binondo Suites in Chinatown, an eight-story hotel-casino building that leases gaming space to the state-owned Philippine Amusement & Gaming Corp.

Based on SEC documents, Leisure & Resorts World Corp. (LWRC) will offer by March 250 million non-voting preferred shares carrying a dividend rate of 8.5 percent per annum at P1 per share. Every 20 preferred shares bought will come with a free warrant entitling the investor to purchase one common share over the long term.

The offer period is expected to run from March 13 to 21 this year.  The listing of these securities is tentatively set for March 31.

Upon full exercise, the underlying warrants are equivalent to a maximum of 12.5 million common shares.  The strike price for the underlying common shares is the lower of either P15 per share or the three-month trading average less a 10 percent discount.

The strike price suggests that LWRC can raise an additional P187.5 million from the sale of common shares if the share price by that time is P15 per share or higher.

The warrants can be exercised by holders starting on March 31, 2019 until March 31, 2022.  The warrants will expire on April 2, 2022.

LWRC plans to use the P250 million proceeds from the preferred shares offer this year to: cover the 50 percent downpayment for the Binondo Suites hotel-casino building (P25 million); acquire, open and renovate gaming sites (P175 million); install new servers for bingo business (P20 million); and automate management and monitoring system (P30 million).