DIGIPLUS Interactive Corp. (PLUS), a listed digital entertainment provider behind BingoPlus, ArenaPlus, and GameZone, has signed a convertible notes agreement granting it the rights to accumulate a controlling stake in International Entertainment Corp. (IEC), which owns and operates Latest Coast Hotel Manila, an integrated hotel and casino complex.
“This move marks a defining step toward DigiPlus’ long-term goal to create probably the most progressive and enjoyable experiences through an entertainment ecosystem, powered by cutting-edge technology and localized products for various cultures,” DigiPlus Chairman Eusebio H. Tanco said in an announcement on Tuesday.
The subscription for convertible notes totals HK$1.6 billion (roughly P12 billion) and shall be issued in two tranches.
The primary tranche, value HK$800 million, shall be accomplished upon satisfaction of customary conditions, while the second tranche will follow inside three months, subject to mutually agreed terms.
“Through this transaction, we’re expanding our omnipresent ecosystem — bridging digital innovation with real-world experiences — to create a brand new era of entertainment that’s engaging, responsible, and globally competitive,” Mr. Tanco said.
DigiPlus has the choice to convert the notes into shares to accumulate about 53.89% of IEC’s issued capital stock at an agreed initial conversion price of HK$1 per share, with a 3% annual rate of interest. If DigiPlus doesn’t convert, the notes shall be redeemable at 108% after five years.
Upon conversion, the acquisition will “strengthen DigiPlus’ omnipresent entertainment ecosystem by adding a strategic offline platform that seamlessly connects with its digital network, enhancing brand activation, player engagement, and customer experience across each physical and online touchpoints,” the corporate said.
“The potential acquisition allows DigiPlus to optimize its group structure by combining IEC’s expertise in hospitality and gaming management with DigiPlus’ leadership in digital entertainment and technology,” it added.
The transaction is subject to approval by IEC shareholders at an Extraordinary General Meeting after execution of the convertible notes subscription agreement, in addition to clearance from the Securities and Futures Commission of Hong Kong and the HKEx.
Conversion of the notes can also be subject to approval by the Philippine Competition Commission.
DigiPlus reported a net income attributable to the parent company of P1.71 billion for the third quarter (Q3), down 51% from P3.52 billion in the identical period last 12 months.
The decline was primarily driven by higher operating expenses, including a 50% increase in depreciation and amortization, in addition to a foreign exchange lack of P69.4 million. Finance income of P48.7 million and a decrease in finance expenses partially offset the impact. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter fell 47% to P2.04 billion.
For the primary nine months, DigiPlus posted an attributable net income of P10.11 billion, up 16% from P8.74 billion a 12 months ago. EBITDA for the nine-month period rose 19% to P11.13 billion.
Revenue for the quarter remained essentially flat at P19.05 billion, versus P19 billion in Q3 2024, with retail gaming revenue holding regular at P18.76 billion and rental income from casinos rising 11% to P145.9 million. Other income streams, including service and hosting fees, declined 38% to P65.4 million.
Over the primary nine months, DigiPlus achieved consolidated revenue of P66.83 billion, up 30% from P51.56 billion a 12 months ago.
On Tuesday, DigiPlus shares fell by 4.94% or P1.30 to shut at P25 apiece. — A.G.C. Magno