Hong Kong-listed Suncity Group has signed an agreement with Philippines subsidiary Suntrust Home Developers Inc which will see its Suntrust stake increase from 51% to 74.42%.
The “CB Subscription Agreement,” a condition of the original “Shares Subscription Agreement” Suncity signed last October to acquire its original stake in Suntrust, will see Suncity subscribe to Convertible Bonds in an aggregate amount of Php7.3 billion (US$145 million) in cash. The bonds will be converted into Suntrust shares pending fulfilment of certain conditions, boosting Suncity’s stake and providing almost half of the US$300 million it needs to raise as per the “Shares Subscription Agreement” for development of a hotel and casino at Westside City Resorts World in Manila’s Entertainment City.
In a Friday filing, Suncity explained the “CB Subscription Agreement” was intended to not only provide funding for the hotel and casino but to “minimize the risk of the Group’s percentage interest in Suntrust from being diluted in the event of future equity related funding exercise of Suntrust.”
Westside City Resorts World, a joint project between Travellers International Hotel Group Inc – operator of Resorts World Manila – and Megaworld Corporation, is a sprawling, multi-billion dollar leisure and entertainment township being developed on 31-hectares in Manila’s Entertainment City precinct.
Suntrust, which is also 43.5% owned by Megaworld and 5.5% by Aurora Securities, will build the hotel and casino at a cost of US$700 million, with 400 gaming tables and 1,200 slot machines across both VIP and mass gaming, plus 400 five-star hotel rooms and 960 parking spaces.
Suncity Group recently announced that it has signed a 45-year lease agreement with Travellers and Westside to operate the hotel and casino, due to open in 4Q22.