By James A. Loyola
Belle Corporation and Premium Leisure and Amusement, Inc. (Belle Group), which are controlled by the SM Group, are buying out the interest of Leisure and Resorts World Corporation and AB Leisure Global, Inc. (LRWC Group) in City of Dreams Manila for P5.09 billion.
In a disclosure to the Philippine Stock Exchange, Belle and LRWC disclosed that they have signed an agreement which would enable the LRWC Group to realize its interests under its existing agreements with the Belle Group.
Under the agreement, Belle will pay the LRWC Group a total of P5.09 billion, with P1.02 billion paid upon signing today and the balance at the end of March, 2017. The proceeds from the transaction are intended to be utilized by the LRWC Group on its core businesses.
The LRWC Group entered into agreements with the Belle Group dated as of March 13, 2013 which effectively granted the LRWC Group an interest of up to 30 percent in the Belle Group’s net revenues under its lease and licensee agreements concerning City of Dreams Manila.
Under the terms of this newly signed agreement, the LRWC Group will be able to finalize its transaction with the Belle Group by the end of March, 2017. Thereafter, the March 13, 2013 agreements will be deemed terminated.
Belle had earlier tapped LRWC for the operation of the then $1-billion Belle Grande integrated casino resort project but it later opted to get Macau-based Melco Crown Entertainment group of companies as partner for the casino which was named City of Dreams Manila.
With the entry of Melco Crown, it was agreed that LRWC and ABLGI will assist Belle in funding its own capital requirements in exchange for a share in the economic benefits to be derived by Belle and PLAI in the casino operation.