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By Katrina Mennen A. Valdez, Reporter
In a disclosure to the Philippine
Stock Exchange, Waterfront said it bested nine other companies vying
for the 50-year lease contract on the Mimosa property.
Waterfront, which is engaged in
the hotel and leisure business, said Clark Development Corp. (CDC)
will issue the notice of award.
Levy Laus, CDC president and
chief executive officer, said Waterfront would pay P1.5 billion for
the contract.
He said that CDC will earn a
minimum annual guaranteed lease starting at P160 million. The
contract may be extended for another 25 years.
Waterfront will invest P1 billion
in the estate within the next five years.
Following the acceptance of the
Notice of Award, CDC and Waterfront will enter into a 90-day
Memorandum of Understanding (MOU) which will mature into a lease
agreement upon the company’s delivery of the initial commitments.
Under the agreement, Waterfront
will initially pay CDC P770 million within 90 days from signing the
MOU. This amount comprises the P450 million required minimum
going-concern value payment, P160- million security deposit and
P160-million advance lease rental.
The hotel operator said it will
also set aside about P5 billion to buy four hotels within the next
two years, funds for which would come from internally generated
cash. The purchases will be done through its affiliates, and are
seen to improve the group’s revenue base without increasing the
parent’s debt levels.
At present, the company is
refurbishing Manila Pavilion Hotel and Casino in Manila. Among the
hotels it manages include Waterfront Cebu City Hotel and Casino,
Water-font Airport Hotel and Casino Mactan and Waterfront Insular
Hotel Davao.
Other hotel developments in the
pipeline include the 3,000-square-meter Grand Waterfront Hotel in
Fort Bonifacio in Taguig City and another 2,000-square-meter
Waterfront Hotel in Ortigas Center, Pasig City.
On Wednesday, the company’s
shares rallied by 2 percent to P0.51 a piece.
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