Just six weeks ago, it was confirmed that PH Resorts Group Holdings Inc (PHR) would begin an exciting $350 million project that would build two elaborate resort casinos in the Philippines. The company had gained approval from the Philippine Securities and Exchange Commission to begin the project and to begin follow-up offerings that would enable them to be able to raise the capital needed to start the project. Now that project looks in serious jeopardy.
In a press release issued by PHR on Friday, the company confirmed that they would be delaying the offering, looking to find alternative options to raise the capital needed. In the statement, the company explained that they were looking for “more strategically suitable alternative options” that would better suit the funding needs of the project.
In late January, PHR was given approval by the SEC to begin the funding venture. The company intended to sell 1.79 billion common shares with an additional 268 million being available if needed. They had even gone as far as to reach an agreement with the China Banking Corporation to underwrite the offer.
Things looked to be moving along with great efficiency, especially after PHR announced in late December that the company had increased its capital stock to 8 billion common shares from 500 million. The SEC had approved the move earlier in December with PH Resorts controlling nearly 4.5 billion of the shares themselves. This even led to the company changing their corporate name from Philippine H2O Ventures to PH Resorts Group.
Dennis Uy, the billionaire who leads Udenna Group, purchased 62% of the shares in PHR, and was the driving force behind the rebranding of the company.
When the casino venture was announced, shares were priced beginning at 3.65 Php up to 5.84 per share, and it was expected that this would fully fund the design, construction, and development of the duo casino resorts.
Instead, the vast majority of the funds raised will now be repositioned to fund the expansion at the Donatela Hotel in Panglao according to the release. The remainder will be used for what the company described as “general corporate purposes.”
While this appears to be a setback, no one should conclude that the project is dead. PHR stressed that they are still “eager” to pursue the project and to ensure that is fully completed and operational. It simply looks like any self-imposed deadline upon which the project would be completed will be moved back.
In addition, the gaming company will have to consult with the SEC to gain any prior approval for funding options. While no alternatives are specifically mentioned, no one should doubt that PHR has figured out some alternatives that will help to get this casino operational within the next two to three years.
