ENTERTAINMENT CITY: share sales, stalled negotiations and local casino impact

TAGs: entertainment city, Melco Crown Entertainment, PAGCOR, Philippines, robinsons land corp, Solaire Manila, tiger resorts leisure and entertainment

philippines-entertainment-city-manilaMelco Crown Entertainment (MCE) shareholders have approved a plan to raise up to $450m via the sale of up to 1.2b shares in Manchester International Holdings Unlimited. In December, MCE acquired 93.1% of the Philippines-based Manchester as a vehicle to manage and operate its Belle Grande Manila Bay resort-casino joint venture with Henry Sy’s Belle Corp. The Manchester share sale is intended to help pay for MCE’s $580m commitment to the project. Belle Grande, part of the Entertainment City project, is set to open in Q4.

The picture surrounding another of Entertainment City’s four casino projects is less clear. Universal Entertainment subsidiary Tiger Resort Leisure and Entertainment (TRLE) and local conglomerate Robinsons Land Corp. are negotiating terms of a deal by which Robinsons would acquire a minority stake in TRLE and a majority stake in Eagle 1 Land Holdings Inc, which owns the land on which the casino in question is being built. The deal, which is necessary to satisfy Philippine ownership requirements, was supposed to be concluded by Jan. 31 but the deadline has now been extended to Feb. 28. A PAGCOR official told Business Mirror that the Jan. 31 deadline had been self-imposed by the negotiating parties, and PAGCOR understood the delay was necessary to allow the two companies “room to complete their negotiation.” That said, until the parties resolve the land issue, “they cannot open the casino.”

Solaire Manila, the Entertainment City project of Enrique Razon Jr.’s Bloombery Resorts, is set to open March 16, and the hype is well underway. Senator Aquilino Pimentel III, who chairs the Senate games, amusement and sports committee, said he expects Entertainment City to eventually contribute P5b (US $123m) annually to Philippine Amusement and Gaming Corporation (PAGCOR) coffers, but acknowledged that “the proof of the pudding is in the eating.” The Manila Bulletin quoted Pimentel saying his advice to PAGCOR was to “package the entire country as an integrated resort with the Entertainment City as just one attraction.”

Meanwhile, PAGCOR is warning that business at casinos situated outside Entertainment City may suffer when the Manila Bay complex is fully operational. On Tuesday, Francis Hernando, VP of PAGCOR’s licensed casino development department, said his outfit was “bracing for the effects” of Solaire Manila’s opening. GMA News quoted Hernando saying PAGCOR was “reviewing the leases” of two of its casinos in the Manila area to determine the practicality of renewing said leases. Hernando said employment shouldn’t take a hit because PAGCOR was “expanding elsewhere” and employees would be given the option of being reassigned “outside of Metro Manila.” Gambling and betting in the Philippines is a P42b ($1.03b) industry, according to figures released by the National Statistics Office (NSO). An estimated 16.7k employees earn a combined P8.3b in annual salaries via the gaming industry, for an average of P497k per employee, well above the most recent figures that put average family income in the Philippines at P206k.


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