Pension fund GSIS invests in casino project

Rappler.com
State-run pension fund Government Service Insurance System (GSIS) invests P800 million in the soon-to-rise casino project

CASINO PROJECT. This is an artist's rendition of the Belle Grande Manila Bay that will house a large casino, two L-shaped hotel towers and 4 condotel towers. Photo from 2011 Belle Corp. Annual Report

MANILA, Philippines (UPDATED) – State-run pension fund Government Service Insurance System (GSIS) invested P800 million in the soon-to-rise Belle Grande Integrated Resort and Casino project at the Entertainment City in Pasay.

In a disclosure on Thursday, July 4, listed firm Leisure & Resorts World Corp (LRWC), a partner of Sy-led Belle Corp, announced that it has raised funds through a share sale of preferred shares to 10 private investors led by GSIS.

Of P1.65 billion funds that LRWC raised, GSIS’s P800 million investment was the highest, followed by local investment house Philippine Commercial Capital, Inc., which put in P200 million.

“We invested in preferred shares with a favorable yield that meets our return threshold,” GSIS president and general manager Robert G. Vergara told Rappler when asked about the investment.

“We also believe that the outlook for the Philippine gaming sector is attractive,” Vergara added.   

The preferred shares that GSIS and other investors have bought have a coupon rate of 8.5% per annum and are paid semi-annually. They are cumulative, non-voting and non-participating.

Each investor who has 20 preferred shares is entitled to one warrant, which when exercised starting on the 5th year at a price of P15.00 or the average weighted trading price, will be converted to one common share.

LWRC said it is working to to secure the necessary approvals from the Philippine Stock Exchange for the listing of the shares and the warrants.

Fund raising

LRWC has been raising funds to finance its participation in the Belle Grande Integrated Resort and Casino project slated to open in 2014. Last May, LRWC’s unit AB Leisure Global Inc (ABLGI) was granted a P3 billion omnibus loan by Sy-led BDO Unibank used to partially fund the LRWC’s P4 billion payment to Belle Corp.

Belle Corp is an upscale property developer and gaming company which is developing the casino-entertainment project with billionaire partners James Packer of Australia and Lawrence Ho of Macau. Belle Corp. is also controlled by the Sys. 

Belle Grande is scheduled to open in the third quarter of 2014. The opening was delayed due to Pagcor’s rule requiring investors to build a minimum of 800 hotel rooms before opening their casino resorts.

The $1.2 billion Belle Grande is located in a 6.2 hectare property with a gross floor area of 300,000 square meters (sqm).

The project will contain 20,000 sqm of gaming space, 6 hotel towers with a total of 950 rooms and a number of high-end bars and restaurants. 

ABLGI, having an economic interest in the casino project, is entitled to 30% of the fixed yearly income that will be generated from the lease of all commercial spaces. – Rappler.com

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