DIGIPLUS Interactive Corp., the listed digital entertainment firm behind BingoPlus, ArenaPlus, and GameZone, said it intends to make use of internal funds for its potential controlling stake acquisition of Hong Kong-listed International Entertainment Corp. (IEC), while remaining open to short-term financing if obligatory.
“We do expect that we’ve got sufficient internal funds, but when we want it, we can even explore some short-term financing,” DigiPlus President Tsui Kin Ming told reporters on Wednesday.
Earlier this week, DigiPlus Chairman Eusebio H. Tanco said the corporate signed a convertible notes agreement granting it the rights to amass a controlling stake in IEC, the owner and operator of Latest Coast Hotel Manila, an integrated hotel and casino complex.
The subscription for convertible notes totals HK$1.6 billion (around P12 billion) and will likely be issued in two tranches. The primary tranche, price HK$800 million, will likely be accomplished upon satisfaction of customary conditions, while the second tranche will follow inside three months, subject to mutually agreed terms.
DigiPlus expects to finish the arrangement with IEC inside eight to nine weeks, Mr. Tsui said, adding that IEC shareholders must approve the agreement and acquire clearance from the Securities and Futures Commission of Hong Kong and the Hong Kong Stock Exchange.
The primary payment is projected by January, while the second will likely be in April, he said.
“At the identical time we also need to obtain approval from PCC (Philippine Competition Commission) for the acquisitions. That may take possibly six to nine months, we still don’t know what the time is on that one. So, until we finish the payment and the approval process then we will consider converting,” Mr. Tsui added.
IEC owns and operates the Latest Coast Hotel Manila, previously generally known as the Latest World Hotel Manila, with 96 gaming tables, 495 slot machines, and other gaming amenities.
For Mr. Tsui, acquiring IEC would further expand DigiPlus’ presence within the mass gaming market within the Philippines.
“We see the competition within the entertainment city is getting very intense and the expansion rate is sort of declining as well. We predict that if we position ourselves within the Malate area, we could achieve much stronger growth because there’s just one casino or integrated resort in that area,” he said.
“After all, the fee of investment is far lower to enter right into a land-based casino within the Malate area versus anyone else within the entertainment city. It would cost at the least $1 billion or more for the whole complex within the entertainment city. So, I believe that’s why we decided to go together with IEC because we can have a probability to own the bulk ownership.”
DigiPlus said it will not be actively pursuing a dual listing on the Hong Kong Stock Exchange but stays open to courting international investors and weighing the strategic benefits of an overseas listing.
For the third quarter, DigiPlus reported net income attributable to the parent company of P1.71 billion, down 51% from P3.52 billion in the identical period last yr.
On the local bourse on Thursday, shares in the corporate closed 30 centavos, or 1.11% lower, at P26.70 apiece. — Ashley Erika O. Jose