Active Alliance to be listing vehicle for Razon’s hotel-casino project

MANILA, Philippines—Dormant holding firm Active Alliance Inc. admitted on Thursday that it would eventually become a listing vehicle for tycoon Enrique Razon Jr.’s hotel-casino venture as widely expected by stock pundits.

The admission followed a disclosure on Wednesday that AAI said it would be acquired by Razon’s Prime Metroline Transit Corp. for P200 million.

AAI on Thursday submitted to the Philippine Stock Exchange additional information on the transaction, paving the way for the lifting of the trading suspension on the company’s shares starting Friday at 10 am.

The additional disclosure noted that Prime Metroline was incorporated in 2010 to engage in the railway transit business but was unable to pursue that interest. This company now owns, through its subsidiary, a hotel casino project, which is currently under construction.

Specifically, Prime Metroline owns Sureste Properties Inc., which in turn owns Bloomberry Resorts and Hotels Inc. Sureste owns the hotel project while Bloomberry owns that casino project now being constructed at Pagcor Entertainment City.

Prime Metroline is wholly owned by Razon and has a paid-up capital of P800 million.

“The corporation will eventually become a listed vehicle for a hotel casino project when the project is acquired by or transferred to the corporation,” the disclosure said.

AAI, owned by the son and namesake of former Bureau of Internal Revenue Commissioner Bienvenido Tan Jr., had seen an extraordinary run-up as pundits bet on the casino backdoor listing. However, the acquisition price by Razon’s group was only at about P3 per share, way below AAI’s last traded price of P76 per share on November 21 prior to the trading suspension.

Razon-led Bloomberry is building a $1.2-billion integrated casino and tourism facility in Pagcor Entertainment City.

AAI is seen as very conducive for backdoor listing as the Tans have two idle listed companies (the other one being the Philippine Tobacco Flue-Curing and Redrying Corp.).  The company also falls short of the minimum public float required to remain listed on the PSE. Other than the monetary fines charged by the PSE, capital gains tax on future stock transactions will be very expensive if any company is stricken off the local bourse due to insufficient public ownership.

Only last week, AAI told the PSE its management had no knowledge of any backdoor listing plans, much less of Razon’s gaming interest.