Razon’s Bloomberry to secure P5.6B from equity exercise

MANILA  -Tycoon Enrique Razon Jr.’s Bloomberry Resorts Corp. is raising about P5.6 billion from a multi-step equity exercise as it moves to seize strong demand for casinos and hotels in the aftermath of the pandemic.

Bloomberry, the operator of Solaire Resort Entertainment City along Manila Bay, said the deal was comprised of a share offer to outside investors and a subsequent subscription deal, thus allowing it to raise money more efficiently.

The first step involves the sale of 559 million Bloomberry shares—equivalent to a 5.1 percent stake in the company—by Razon’s privately-held Quasar Holdings Inc. for P10 per share or a 7-percent discount from the previous day’s close.

Bloomberry shares fell over 6 percent to P10.10 per share on Friday, nearly matching the discounted value.

The company said the transaction would be faster since it “will not require registration under the Securities Regulation Code.”

Once this is completed, Bloomberry will issue the same number of new shares at the same price to Razon’s Quasar. This means the money will be invested back into the casino giant.

“The conduct of an equity fund raising by way of a placing and subscription transaction allows [Bloomberry] to raise equity funds in a most expeditious and efficient manner, with the least cost to [Bloomberry],” the company said in a stock exchange filing on Friday.

“The transaction is also intended to strengthen and broaden the capital base of [Bloomberry], as well as to promote a wider dispersion of the shares to a broad spectrum of institutional investors,” it added.

Bloomberry, one of four integrated casino operators in Manila’s Entertainment City gaming district, has seen its business recover strongly over the past year.

During the first six months of 2023, net income surged 160 percent to P6.4 billion. Even when removing the impact of a one-time asset sale, profits during the period were up 145 percent.

Total revenues expanded by 48 percent to P25.6 billion while total gaming revenues jumped 41 percent to P31.2 billion.

Bloomberry is also expanding operations to Quezon City through the opening of Solaire Resort North next year.

The project is also being financed by a P40-billion syndicated loan facility. In a sign of confidence, lenders agreed to waive the testing of conditions for the debt facility until June 30, 2026.

“While the business is generating sufficient cash flows, this waiver will give Bloomberry an extra cushion that will allow management to put greater focus on completing Solaire Resort North and ramping up its operations when it opens next year,” Bloomberry said in a recent filing.