Belle inks $1-B deal with Macau casino giant giantgiantgiantbannner

MANILA, Philippines - Tycoon Henry Sy’s upscale leisure estate developer and gaming firm Belle Corp. is back in the game  following the formal signing of a deal with Macau casino giant Melco Crown Entertainment Ltd. to jointly build a $1 billion gaming complex on reclaimed land along Manila Bay.

In a disclosure to the Philippine Stock Exchange, Belle said its wholly-owned unit Premium Leisure and Amusement inked a cooperation agreement with  Melco, owned by Australian billionaire James Packer and Macau gambling tycoon Lawrence Ho.

Under the agreement, Belle  and Melco are co-licensees with the Sy-led firm owning the project’s land and buildings, while Melco will operate all the facilities within the resort complex.  

Both companies are expected to make equal investment contributions to the project,  located within the Philippine Amusement and Gaming Corp.’s Entertainment City.

The project will be the second complex to open in the area groomed to become the Philippines’ version of the Las Vegas strip, next to port mogul Enrique Razon’s Solaire Casino & Resort.

Willy N. Ocier, vice chairman of Belle, said: “We are very happy to welcome Melco into the Philippines.  We could not have found a better partner for this endeavor.  We are confident that Melco will bring its expertise in operating a highly successful integrated resort complex and strongly contribute to promoting the Philippines as one of Asia’s premiere tourism destinations.”

Ocier said the revitalized consortium is ready to slug it out with the three other firms that were issued a license to build a casino worth at least $1 billion each at the Entertainment City. 

Aside from Razon, the two other licensees include Japanese pachinko tycoon  Kazuo Okada’s Universal Entertainment  and Travellers International Hotel Group, a  joint venture between property tycoon Andrew Tan’s  Alliance Global Group and Malaysian conglomerate Genting Group.

“It will be far bettter than Solaire.  Lawrence Ho and James Packer upgraded and expanded the concepts to make sure that we are the best in Manila Bay,” Ocier said in a mobile phone message.

The project, which had been sidelined due to financial issues,  is targeted for opening in the first half of 2014, Ocier said.

Analysts said the partnership bolsters the Philippines’ bid to be a major gambling destination in Asia.

The project was originally a partnership between Belle and bingo operator Leisure & Resorts World Corp. until the latter  turned over to Melco the task of managing and operating the integrated casino and hotel complex in exchange for a share in the project’s  earnings.

Ocier said LRWC is still involved in the project.  “LR is still with us.  We will sign with them soon,” he said.

LRWC was tapped by Belle in 2011 to handle the gaming component of the integrated resort given the latter’s lack of gambling experience. The company operates professional bingo and interactives games licensing at the Cagayan Economic Zone Authority.

The huge financing requirement and the Philippine Amusement & Gaming Corp.’s requirement for a minimum 800-room hotel to be in place before casinos could operate within the Entertainment City  hindered the development of the project, prompting Belle and LR to find a foreign strategic partner.

Belle was initially looking at teaming up with US-based Harrah’s Entertainment Inc., which owns over 50 casinos under the Bally’s, Caesars, Horseshoe and Rio brand names but talks bogged down.  Belle eventually picked LRWC as its partner for the project.

Belle may have found the perfect fit in Melco, which has placed a large bet on expanding to one of the world’s emerging casino markets.  Melco expects to invest up to $580 million over the course of project.

The project would be Melco’s first outside Macau where it operates the City of Dreams and Altira Macau casinos. The company is developing its third casino, Studio City, which is slated for opening in 2015.

In an earlier statement, Melco said it wanted to “take advantage of the anticipated growth in the leisure and tourism industries in the Philippines which will cater to an increasingly affluent and growing Asian middle class who continue to seek new travel destinations and experiences.”

Gambling revenues in the Philippines are forecast to grow from $1.3 billion in 2011 to $3 billion in 2015 once four new resorts are completed.

The Sy family’s flagship company SM Investments Corp. is involved in five core businesses - retail merchandising, mall operations, property, banking and hotel and leisure.