RESORTS World Bayshore City, the integrated resort and casino led by businessman Andrew Tan, will start construction of its facilities in Entertainment City by the end of the year, the company said.
Construction of the Phase 1 of the project will start within 90 days and should be completed by 2018, Alliance Global Group Inc. (AGI) President Kingson Sian said during the company’s stockholders’ meeting.
The company originally planned to start construction by 2012, expecting completion by the fourth quarter of 2016. “It’s not our fault.
The land was just transferred to us [by the Philippine Amusement and Gaming Corp. (Pagcor)],” Sian said, referring to the 30.5-hectare land where his firm’s casino will be built on.
He said the first phase of the project will use less than a third of the entire land area, which is equivalent to 60 football fields. Sian declined to give the amount the company plans to spend for the initial phase, saying they are still crafting the master plan. AGI’s commitment with Pagcor for the entire project was at $1.1 billion, documents provided by Sian said.
The initial phase includes three hotels that will have a combined number of at least 800 rooms, casino and window shops and a 3,000-seater theater, Sian said.
The project will be spearheaded and owned by a new entity called Resorts World Bayshore.
It will eventually be owned by Travellers International Hotel Group Inc., AGI’s leisure and gambling arm.
Officials earlier said the initial brands of hotel in the development site include the following: Okura, the previous operator of Nikko Hotel Manila Garden in Makati (now Dusit Hotel); and Westin, the previous operator of Philippine Plaza Hotel in the Cultural Center of the Philippines complex in Pasay City. Both brands already left the Philippines.
Still, Sian said the company will introduce their own brand of hotel to cater to the higher-end market segment. He said AGI “will make some detailed announcement by October.
On the other hand, Sian said AGI will focus on its core businesses in a move to reach a growth of 10-percent profit by end of the year.
“Rather than diversifying into other businesses, which may not be within our core competence, we will focus our energy on strengthening and growing our existing business,” Sian said.
Tan’s firm is busy raising some P31.7 billion to pay for its acquisition of White & McKay, as its unit Emperador Inc. already prearranged some of the funding even before the approval of various authorities.
Sian said a third of the funding may come from equity and the rest from bilateral loans, which will also be a combination of long-term and short-term tenors.
Emperador earlier said it is buying Whyte & Mackay Group Ltd., the world’s fifth-largest whiskey manufacturer, for £430 million in cash.
The company said it may raise funds from debt, but a significant portion of the payment will come from its cash pile of about P24 billion as of last year. Sian said the deal only awaits approval from the Reserve Bank of India, the country’s central bank, as the sale will result in significant write-off of loans recoverable by United Spirits Ltd., Whyte & Mackay’s previous owner.
AGI earlier said its consolidated net profit for the first half reached P11.37 billion, a mere 1-percent gain from P11.24 billion last year. For the period, property developer Megaworld Corp. contributed about 44 percent of the total net income at P5 billion, followed by Emperador at P3.05 billion, or 27 percent; while Travellers is at P2.88 billion, or 25 percent.
Golden Arches Development Corp., the master franchisee of McDonalds in the Philippines, contributed about P322 million (3 percent) to the firm. Some P112 million came from Tan’s other businesses, or 1 percent of the company’s income.
“Revenues from sale of goods—real estate, alcoholic beverages and snack products—increased by 3.6 percent, while rendering of services—gaming, hotel, quick-service restaurants, rentals—dwindled by 5.9 percent, primarily due to 22-percent contraction of gaming revenues from where almost half of service revenues come from,” the company said.