MANILA, Philippines—Leisure estate and gaming firm Belle Corp. plans to open its casino in Pagcor City “sometime next year” and is now awaiting an additional P3-billion fund-raising by partner Leisure and Resorts World Corp. to build the hotel portfolio required by the government.
Belle vice chairman Willy Ocier told reporters after the company’s annual stockholders’ meeting that LR would have to undertake a second round of financing to meet the front-loading of expenses arising from the Philippine Amusement and Gaming Corp.’s requirement to gaming licensees that an 800-room hotel portfolio must be up and running before the casino itself could start operations.
“They (LR) have to go through another round of cash raising. Talks are ongoing for them to actually come up with the part 2 financing to beef up equity and operational capacity but I can’t say who,” Ocier said.
Ocier said LR was supposed to come up with another P3 billion on top of its existing P3 billion in funds from equity (P1 billion) and bank financing (P2 billion). Altogether, he said LR would need P6 billion to finish the interior and fit-out of the facility and boost operating capital to operate the whole complex.
“So far, (there’s) no amendment on our arrangement but they need to fix up their side. We want to be convinced that the financing is in place. Remember that LR and its operators will be leasing the premises form us and then we’ll be sharing in the EBITDA [earnings before interest, taxes, depreciation and amortization],” Ocier said.
Under the arrangement, the LR group will get 15 percent of net winnings, or 50 percent of the casino’s cash flow (as measured by EBITDA), whichever is higher.
For its part, Belle has raised P4.5 billion from a stock rights offering and raised another P4.2 billion in debt financing which has not been fully drawn yet. This funding is deemed sufficient to keep its commitment on this project, Ocier said.
Belle Grande is being constructed on more than six hectares of land in a central area in the Aseana Business Park in Parañaque City. It will have a total gaming area of 1.8 hectares surrounded by food and beverage outlets, with luxury retail stores at the margins.
The company broke ground on the mall component in February and is expected to complete the retail complex by 2014. This mall will have 60,000 to 90,000 square meters of retail space. The mall will also have a world-class performing arts theater.