SEC approves Discovery World P1-billion offering


The Securities and Exchange Commission (SEC) has given its green light for Discovery World Corp. to pursue its planned P1-billion initial public offering (IPO) in the local bourse within this year.

In a memorandum, the SEC said that it has approved the more than P1-billion IPO of Boracay resort operator Discovery World, which consists of 306 million shares at a maximum price of P3.28 a share.

The offering of the shares will be on July 23 to 29 of this year. The company said, however, that the offer period remains tentative and still subject to prevailing market conditions and the approval by the SEC and Philippine Stock Exchange.

Discovery World plans to use part of the proceeds to invest in certain companies.

“In February, the company entered into a memorandum of agreement with Hotel Systems Asia Inc. to purchase 11.38 percent, or 8.86 million shares of Enderun Colleges Inc. for a total consideration of P110.91 million, which shall be paid through the net proceeds of the offer,” the company cited.

Part of the proceeds from the offer will also be used to fund the purchase of all the rights and interest to 240,000 or 100 percent of Discovery Fleet Corp.

In view of its proposed hotel and resort project in Palawan, the company has also planned to purchase all the rights and interest to 50 million shares of Palawan Cove Corp., which shall also be paid through the net proceeds of the offer.

“The broker representing the owners of the Coron Property that the company is eyeing requires the company to earmark P125 million for the property as proof of funds for said owners to put on hold all discussions they have with other interested parties until after the company’s IPO,” the company said, adding that the firm is planning to tap a P125-million loan by early to mid-July 2013 for the transaction.

Moreover, Discovery World Corp. plans to invest in new businesses that are all tourism-related, which shall include a resort in Palawan, a diving cruise business, and a hotel and
restaurant management school.

The company will also be allocating P325 million of the proceeds to settle its short-term obligations with East West Bank and Bank of the Philippine Islands.

Lastly, Discovery World intends to allocate the balance of the net proceeds amounting to P55.2 million for the working capital requirements of Discovery Shores Boracay, and for the new business in which the company will be making investments. Abacus Capital and Investment Corp. has been tapped as the issue manager and underwriter for the IPO.


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