• P5-B diversification from bingo to casino

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    Insider’s trade. On July 26 when DMCI Holdings Inc. opened at P54, hit a high of P54.15, fell to a low of P53.65 and closed at P53.90, Cristina Gotianun, assistant treasurer, bought 23,470 shares at P53.93 each. Before the acquisition, or as of June 30, she owned 20.1 million DMCI shares, or 0.75 percent, of which she directly owned 1,100 shares.

    Insider’s trade 2. Jonathan Gotianun, a member of the board of EastWest Banking Corp., bought 20,700 EastWest bank shares. The acquisition increased the number of shares he owned to 4.2 million shares. On July 26 when he bought additional shares, EastWest Bank closed at P28.80 after opening at P29, which was also the session’s high, and dropped to a low of P28.70.

    Insider’s trade 3. Earl Eric Nestor Hilario Ferrer, a vice president of International Container Terminal Services Inc., reduced the number of ICTSI shares he owned to 83,220 after selling 2,000 ICTSI shares at P92.30 each on July 23 when the stock, which opened at P91, closed at session’s high of P93.

    Bingo games. Being engaged in the leisure business, Leisure and Resorts World Corp. (LWRC) considers bingo a form of entertainment—but a profitable one—which it provides the public through 69 bingo outlets nationwide.

    In the year’s first quarter ending March 31, LWRC reported net profit of P74.3 million, which resulted from revenues of P1.2 billion. In the same period in 2012, it recorded net profit of P33.5 million on revenues of P1.1 billion.

    As of March 31, 2013, it had piled up retained earnings of P776 million, which LWRC is tapping for distribution as dividends either in cash or in stock.

    Going big. With the government’s efforts in making the Philippines the region’s gambling capital, four business groups are spending at least P200 billion in developing a casino city, which is intended to attract big players from other countries.

    Because it sees profit potentials from big-time gambling that is casino, LWRC is not one to stay behind other gambling companies.

    From operating bingo in SM malls through AB Leisure Exponent Inc., LWRC is investing in casinos, though not directly but through Belle Corp., its parent company.

    In diversifying from bingo to something much bigger, LWRC has been attracting both investors and lenders.

    Fund raising. As of latest filing, LWRC has already raised close to P5 billion, which it will invest in what has been defined in various filings only as hotels and resorts complex. It initially raised P1.6 billion by issuing preferred shares to 10 investors of which it identified only two: the Government Service Insurance System (GSIS) and Philippine Commercial Capital Inc. with investments of P800 million and P200 million, respectively.

    Of course, GSIS is among the LWRC investors, because it urgently needs investments that would pay more in anticipation of more retirement benefits claims from retiring members.

    (If Robert Vergara, GSIS president and general manager, wants to know how much it needs, say 10 years from now, it only needs to review the report of the Commission on Audit on salaries and allowances of government executives. He would be surprised to learn that one water district general manager received more than P6 million in compensation in 2012.)

    LWRC, through AB Leisure Global Inc., a wholly owned unit, also borrowed P3 billion from BDO Universal Bank Inc. “This amount,” LWRC said, “Partially funded the P4-billion payment to Belle Corp. which the latter will, in turn, use for the Belle Grande Integrated Resort and Casino project.”

    P10-B capital. To meet the logistics it needs to invest in casino, LWRC is also increasing its authorized capital stock from 1.6 billion common shares to 5 billion shares, equally divided into common and preferred shares. Both classes carry par value of P1 per share.

    Of the original 1.6 billion common shares, LWRC has already issued more than 999 million, leaving it with more than 600 million for issuance.

    With the capital increase, LWRC will have more than 1.5 billion common shares available for sale to investors. At a low of P6.75 per share, these would be worth around P10 billion, a huge amount which LWRC could easily raise by tapping public investors, particularly the existing stockholders.

    esdperez@yahoo.com

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