DigiPlus Interactive Corp, the listed digital entertainment firm behind BingoPlus, ArenaPlus and GameZone, said it intends to use internal funds to fund a potential controlling stake acquisition of Hong Kong-listed International Entertainment Corp (IEC), while remaining open to short-term financing if necessary.
“We hope we have enough internal funds, but if we need it, we can also explore some short-term financing,” DigiPlus Chairman Tsui Kin Ming told reporters on Wednesday.
Earlier this week, DigiPlus Chairman Eusebio H. Tanco said the company has signed a convertible note agreement giving it the right to acquire a controlling stake in IEC, the owner and operator of New Coast Hotel Manila, an integrated hotel and casino complex.
The total subscription of the convertible notes is HK$1.6 billion (approximately P12 billion) and will be issued in two tranches. The first tranche of HK$800 million will be completed upon satisfaction of customary conditions, while the second tranche, subject to mutually agreed terms, will be completed within three months.
DigiPlus expects the arrangement with IEC to be completed within eight to nine weeks, Mr. Tsui said, subject to IEC shareholders approving the agreement and approval from the Securities and Futures Commission of Hong Kong and the Hong Kong Stock Exchange.
The first payment is expected to be made by January, while the second will be made in April, he said.
“At the same time we also have to get approval from the PCC (Philippine Competition Commission) for the acquisition. It will probably take six to nine months, we still don't know what the timing is on that. So, until we complete the payment and approval process, we can consider the conversion,” Mr Tsui said.
IEC owns and operates the New Coast Hotel Manila, formerly known as the New World Hotel Manila, which has 96 gaming tables, 495 slot machines and other gaming facilities.
For Mr. Tsui, the acquisition of IEC will further enhance DigiPlus' presence in the mass gaming market in the Philippines.
“We are seeing that the competition in the entertainment city is becoming very intense and the growth rate is also declining. We think if we position ourselves in the Malate area, we can achieve very strong growth because there is only one casino or integrated resort in that area,” he said.
“Of course, the investment cost to enter a land-based casino in the Malate area is much lower than any other in the entertainment city. It would cost at least $1 billion or more for the entire complex in the entertainment city. So, I think we decided to go with IEC because we would have the chance to have majority ownership.”
DigiPlus said it is not actively pursuing a dual listing on the Hong Kong Stock Exchange, but is open to attracting international investors and assessing 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 same period last year.
The company's shares closed down 30 centavos, or 1.11%, at P26.70 on the local bourse on Thursday. , Ashley Erica O. jose
