The Century Properties Group (CPG) is considering taking legal moves against Japanese hotels and casinos businessman Kazuo Okada’s group after the latter scrapped a proposed partnership with the local developer.
Under the partnership deal, CPG was supposed to develop a luxury residential and commercial project on a five-hectare site within Okada’s sprawling 44-hectare Manila Bay Resorts venture.
CPG told the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) that it received a “Notice of Termination of the Investment Agreement” from Jose Lis Leagogo, who represents Eagle I Landholdings Inc., Eagle II Holdco Inc. and Brontia Ltd. The three firms are collectively known as the Okada Group.
“CPG is of the strong legal position that the notice of termination is not only premature, but also is unfounded as it lacks legal and contractual basis,” the developer said in a regulatory filing.
The scrapping of the proposed partnership marks a sharp deterioration in relations between the two firms.
The Okada group has yet to issue a response to the statement by CPG on the matter, and the Manila Times is awaiting any disclosure that might come from the Japanese group via the Tokyo stock exchange.
Last Friday, CPG sent a notice of dispute to the Okada Group, putting in motion a mandatory 21-day discussion period between the two parties.
“Such 21-day period is still effective, yet Eagle I Landholdings, Eagle II Holdco and Brontia sent such notice of termination. The company will shortly be replying to the notice of termination,” CPG said.
CPG has asserted that the Okada Group’s “maneuver” is apparently aimed to get out of its exclusivity agreement with Century.
“Century is currently reviewing its legal options to preserve its rights and shall issue an official response to the notice of termination shortly,” the company said.
Last October, the Okada Group invited CPG to take a stake in Eagle 1 and develop a luxury commercial and residential project at its Manila Bay Resorts venture. The two groups forged a deal a month after to work together on the project.
Okada’s Universal Entertainment Corporation then proceeded to issue an announcement through the Tokyo Stock Exchange that its Philippine affiliate, Eagle I Landholdings Inc., has agreed to allow Philippine partners, CPG and First Paramount Holdings 888 Inc., to hold as much as 720 million voting preferred shares of Eagle I.
“This issuance of 720 million voting preferred shares results in more than 60 percent of Philippine national ownership of Eagle I, and this agreement will create a more favorable situation in response to the land ownership requirements,” said Universal Corporation representative director and president Jun Fujimoto.
Part of the agreement calls for the joint development by Eagle I and CPG of a residential project and a shopping center on a five-hectare portion of Okada’s 44-hectare Manila Bay Resorts development, located in Entertainment City.
Century said it has allocated US$12 million for the development, sourced from its available cash balances as of 2013. However, it has not released the funds pending the closure of its proposed joint venture agreement with the Okada Group.
Before forging a preliminary joint venture agreement with CPG, Okada reportedly held talks with John Gokongwei’s group on a possible casino partnership. However, the two sides apparently failed to reach any agreement.
Okada also reportedly explored a possible partnership with Andrew Tan’s on a $2 billion casino hotel venture. But the talks led nowhere.
In 2008, Okada’s Universal Entertainment acquired development rights to a 44-hectare reclaimed site in Manila Bay and was given a provisional license by the Philippine Amusement and Gaming Corporation to operate a casino in the country.