International Entertainment Corporation (IEC) has proposed issuing up to HK$1.6 billion ($205 million) in convertible notes and is seeking shareholder approval for a related whitewash waiver that could exempt its Philippine partner from making a mandatory takeover offer.
In a circular released on Monday, the Hong Kong-listed casino and hotel operator said it had entered into a subscription agreement with DigiPlus Interactive Corp, a Philippine-listed digital gaming group, for the issuance of convertible notes in two tranches of HK$800 million ($103 million) each.
If fully converted at an initial conversion price of HK$1 ($0.13) per share, the notes would result in the issuance of up to 1.6 billion new shares, representing about 53.9 percent of IEC’s enlarged share capital, according to the document.
IEC said an extraordinary general meeting (EGM) would be held on February 26th to seek shareholder approval for the transaction, including a specific mandate to issue the conversion shares and a whitewash waiver under Hong Kong’s Takeovers Code.
The whitewash waiver, if approved, would exempt DigiPlus from the obligation to make a mandatory general offer for all outstanding IEC shares that could otherwise be triggered by the conversion of the notes.
Part of the proceeds from the subscription — around HK$489 million ($63 million) — is intended to be used to repay existing promissory notes that carry an annual interest rate of 6 percent, while the remaining funds will be used to support IEC’s casino and hotel operations in the Philippines over the next two years, the company said.
The notes will carry an interest rate of 3 percent per annum and mature five years after issuance. Unless previously converted, IEC will redeem the notes at 108 percent of principal upon maturity.
IEC said the conversion price represents a discount of about 16.7 percent to the company’s closing share price on the date the subscription agreement was signed in November, but a significant premium to its net asset value per share.
The company reported revenue of HK$566 million ($73 million) for the year ended June 2025, more than double the previous year, but posted a net loss of HK$282 million ($36 million).
IEC operates Newcoast Hotel & Casino complex in Manila and said the proposed financing would improve liquidity, reduce higher-cost debt and strengthen its long-term financial position.
