Belle plans to cut stake in Sinophil to boost liquidity

Leisure estate and gaming firm Belle Corp. is considering to pare down its stake in Sinophil Corp. within the year to boost the latter’s stock trading liquidity and make it more attractive as a gaming investment play.

Belle recognized the need to widen the public float of Sinophil, which shareholders agreed to rename Premium Leisure Corp. to reflect its transformation as a gaming investment holding arm, while Belle would be content to keep 67 to 70 percent of this subsidiary, Belle vice chair and Sinophil chair Willy Ocier told reporters after Sinophil’s stockholders’ meeting last Friday.

After the consolidation of gaming assets in Sinophil, which will own half of the gaming operations of the upcoming City of Dreams Manila, Belle will own close to 90 percent of the future gaming arm, enough to comply with the 10-percent minimum public float requirement to remain listed on the Philippine Stock Exchange but still too small to be accepted widely by stock market investors.

“We believe that because of this transaction there will always be a lot of questions and demand from the investor community for shares and it’s very likely that the company will think of a strategy on how to improve that liquidity,” Ocier said. “Going forward, because Sinophil has no capex (capital expenditure) requirements, we will not be issuing new shares to raise money for Sinophil.”

The most logical step, Ocier said, would be for Belle to place out some of its shares to allow more investors to come in. “Belle does not really have to own 90 percent. We believe that even by owning only 70 percent, we’ll be happy with that level, so there’s a possibility of liquifying [some shares],” he said.