LWRC still part of Belle Grande gaming complex

Entertainment City. PHOTO FROM PAGCOR.PH

MANILA, Philippines–Gaming firm Leisure & Resorts World Corp. (LWRC) will remain part of the $1-billion Belle Grande project that will rise in front of Pagcor Entairtainment City by next year, the company said.
In a press statement late Sunday, LWRC said it would contribute P4 billion to the project and get a share of Belle’s earnings from the leasing of commercial space as well as a piece of casino earnings.
Although not a party to the Belle Corp.-Melco Crown Entertainment Ltd. gaming deal finalized last week, LWRC will get a share of Belle’s economic interest in the project. In its statement, LWRC said had signed last July 5 along with its wholly-owned subsidiary AB Leisure Global Inc. (ABLGI) an amended memorandum of agreement with Belle and Premium Leisure and Amusement Inc. (PLAI).
“In exchange for the ABLGI’s contribution, ABLGI shall be  entitled to 30 percent of the fixed yearly income generated from the leasing of all commercial space in the project, inclusive of the hotel, retail and casino premises,” LWRC said.
“Moreover, ABLGI shall be paid fees equivalent to a 30 percent of PLAI’s 50 percent share of the EBITDA (earnings before interest, taxes, depreciation and amortization) from casino operations or 30 percent of PLAI’s 15 percent share of the net win, whichever is higher, after deducting PLAI’s royalty which is based on gross win,” the statement said.
Overall, this stake will be equivalent to an estimated overall economic interest of 6 percent in the project and a net interest of 44 percent for Belle, said Cora Guidote, investor relations officer at SM Investments Corp. which holds the controlling interest in Belle.
Under the old arrangement when Melco was not yet part of the consortium, LWRC was to get 15 percent of net winnings, or 50 percent of the casino’s cash flow, whichever is higher.
LWRC and its operators originally were supposed to lease the premises from Belle.
LWRC said it, along with ABLGI, agreed to amend their previous agreements because of the changes in the development guidelines issued by the Philippine Amusement and Gaming Corp. on July 18, 2011 which effectively and materially changed the terms and conditions of the provisional license granted to the SM consortium in December 2008. For instance, Pagcor issued a requirement that an 800-room hotel portfolio must be up and running before the casino itself can start operations, requiring the front-loading of greater capital outlays.
For its part, ABLGI’s estimated contribution of P4 billion to the project will be funded through debt and internally generated income, LWRC said.  The company added this contribution would account for 30 percent of Belle’s share in the project.
Melco is a developer and owner of integrated resort facilities focused on the Macau market.  Its “City of Dreams” complex is a highly successful project that houses a gaming facility, a Crown Hotel, a Grand Hyatt Hotel, a Hard Rock Hotel and an upscale retail operation, along with a mix of bars and restaurants that are drawing crowds mainly from Hong Kong and China.  This complex is also known for “The House of Dancing Water” show.
The Macau casino group – which is co-owned by Lawrence Ho Yau Lung, son of casino mogul Stanley Ho Hung Sun and Australian billionaire James Packer – is building is second integrated resort in Macau called “Studio City.