RAZON-LED Bloomberry Resorts Corp. has found a buyer for its casino business in South Korea, which analysts say could help strengthen its earnings outlook.
In a disclosure to the stock exchange on Monday, Bloomberry said its indirect subsidiary, Golden & Luxury Co. Ltd., has signed a share purchase agreement with Gangwon Blue Mountain Co. Ltd. to spin off and sell its casino business.
The buyer has made a down payment of 500 million Korean won (about P20.48 million), the company said. Completion of the transaction is subject to regulatory approval.
Golden & Luxury operates the Jeju Sun Hotel & Casino, located on Jeju Island, one of South Korea's major tourist destinations.
“The aim of the divestment is to cut losses and reallocate corporate resources to Philippine operations. This is a positive development for Bloomberry as it will turn around from a loss-making business,” Juan Paolo E. Collet, managing director of China Bank Capital Corp., said in a Viber message.
Jeju Sun's gross gaming revenue (GGR) fell 93% in the second quarter to P2.5 million from P35.7 million in the same period last year, Bloomberry data shows.
COL Financial gaming analyst Richard LaNada said Bloomberry could benefit from the sale.
“In terms of the financial impact of the transaction, the casino license has already been fully decommissioned last year, so there will be no outright loss on that, but it is likely that Bloom will make a profit on other assets such as the casino building and gaming equipment,” he said.
Bloomberry reported a net loss of P1.4 billion in the second quarter, a reversal from a net profit of P1.3 billion recorded a year earlier. Its total GGR also declined by 1% to P14.3 billion, reflecting weak demand in its VIP and premium mass segments.
The company operates Solaire Resort Entertainment City in Parañaque and Solaire Resort North in Quezon City.
At the local bourse on Monday, Bloomberry shares fell 2.76% or nine centavos to close at P3.17. – Beatriz Marie D. Cruz
