Hong Kong-listed International Entertainment Corp. reveals that the firm is aligning its plan for the potential acquisition and development of New Hotel Land with the master development plan proposal for the development of the integrated resort (IR) under the provisional casino license in the Philippines.
The gaming and hotel operator in the Philippines disclosed last month that it has entered into an agreement with PAGCOR, as the nation’s gaming regulator has granted a provisional license to ‘establish and operate a casino and development of an Integrated Resort in the City of Manila’.
International Entertainment has pledged to invest no less than $1 billion and up to $1.2 billion for the casino project.
Based on the agreement with PAGCOR revealed via filing earlier, International Entertainment’s IR project shall have a total gross floor area of at least 250,000 square meters. The key concept components of the proposal approved by PAGCOR comprise a hotel with approximately 800 5-star luxury hotel rooms, a casino, restaurants, leisure facilities, and shopping arcades.
‘The Project components may change depending on market conditions but without changing the key concept, and without in any way diminishing the investment commitment amount. Changes in the Project components shall be subject to PAGCOR’s prior written consent,’ it read.
In its annual report, International Entertainment also updates its financial status, as the firm entered into a placing agreement with a placing agent in 2017, which had net proceeds of HK$358 million ($45.8 million).
According to the agreement, HK$150 million ($19.2 million) is set for the renovation of a hotel of the Group in Manila City, the amount was utilized as of June 30th this year.
HK$100.0 million is set for the development of the parcels of land adjacent to the Hotel, including the construction of a carpark and amenities of the Hotel, and the provision of a facility to an independent third party for the acquisition of the New Hotel Land.
The firm notes that HK$52.6 million ($6.7 million) out of HK$100.0 million ($12.8 million) has been spent with HK$51.9 million ($6.6 million) loan to Harbor View Properties and Holdings, Inc. for the acquisition of the New Hotel Land and HK$0.7 million ($100,000) for the payment of the design and consultancy services fees for the development of the New Hotel Land.
‘Priority will be given to the development of the new lands to be acquired in the Potential Acquisition before the development of the New Hotel Land,’ it wrote.
HK$70 million ($9 million) is set for the potential acquisition of lands in the Philippines for the construction of a hotel and/or casino. However, the expected timeline for the application of these net proceeds is postponed to on or before 30 June 2024.
In Monday’s filing, the group notes that ‘it has gained its expertise in the operation and management of casino as the Group has taken part in the management of the existing casino through its participation in the management committee since the execution of the cooperation agreement in 2021.’
‘We believe that the grant of the Provisional License is a milestone development of the Group which denotes that the Group will be able to operate and manage gaming business independently. It provides an opportunity for the Group to participate in the gaming and entertainment in addition to the existing hotel and hospitality markets in the Philippines and will enhance future earning capability and potential of the Group.’
Regarding the future development of an IR, the group ‘will consider different financing methods, such as bank borrowing and/or equity financing (as the case may be) in order to expand our business and maintain the liquidity of the Group.’
Revenue up 142.3 percent
The Philippines’s gaming operator reports that its revenue for the financial year ended 30 June 2023 was HK$207.2 million ($26.5 million), representing a year-on-year increase of 142.3 percent.
The group reported a gross profit of HK$136.6 million ($17.5 million) for FY23, representing an increase of approximately 521 percent, as compared with HK$22 million in FY22.
‘The group had a strong comeback for this year in terms of financial performance thanks to the return of the Philippines to one of the global tourism and gaming hotspots following the reopening of its international borders and the dropping of all capacity restrictions and lockdowns in the first half of 2022.’
‘Business activities in the country have gradually picked up since then. This year, the economy of the Philippines has maintained a robust growth trajectory to be on par with the pre-pandemic level and proved itself among the fastest-growing economies in Southeast Asia.’