The fate of the Casablanca Casino in the Clark Freeport Zone in the Philippines remains in limbo because its new owner, casino investor Frontier Capital Group, has yet to cough up the remaining escrow requirements of the Philippine Amusement and Gaming Corporation (PAGCOR).
Australia-listed Frontier Capital Group acquired the Stotsenberg Hotel and Casablanca Casino in 2015 for a total consideration of US$26 million. However, the state regulator shut down the casino operations at the Clark property in the first quarter of 2017 because Frontier Capital still needed to settle an escrow account amounting to PHP225 million (A$4.5 million), the casino investor said in a filing.
Frontier Capital originally covered the escrow amount with a bank guarantee, but it has lapsed. Now, the company said it plans to secure the escrow “with a cash deposit.”
“The company continues to seek the necessary funds,” Frontier Capital said in its filing.
The trading of Frontier Capital’s shares on the Australian Securities Exchange has also been suspended since February 2016, but the company expects to resume trading once it settles the escrow account and restarted its Casablanca Casino operations.
The Clark casino shutdown has left close to 200 workers without jobs, but the operation of the 239-room Stotsenberg Hotel, has not been affected.
The company released the preliminary results for the year ended December 31, 2016, explaining that the delay was “due to the complexity and inherent uncertainty of completion of a transaction to meet PAGCOR’s requirements.”
Frontier Capital recorded a net loss of A$41.4 million (US$32.8 million) for the full-year 2016, including a “goodwill impairment” amounting to A$39.1 million in connection with the acquisition of the Stotsenberg Leisure Park and Hotel Corp., which operates the Clark casino and hotel property. The casino investor had high hopes for the casino, which is located less than two kilometres from the Clark international airport.