LRWC sells stake in City of Dreams

MANILA, Philippines - Leisure and Resorts World Corp. (LRWC) has sold its interest in the gaming operations of City of Dreams Manila in favor of Belle Corp., the high-end property developer of the SM Group.

Belle Corp. and LRWC signed an agreement yesterday that would enable the latter to realize its interests under its existing agreements with the Belle Group.

“Under the agreement, Belle will pay LRWC group a total of P5.09 billion, with P1.018 billion paid upon signing and the balance at the end of March 2017,” the companies said in  separate disclosures to the Philippine Stock Exchange (PSE) yesterday.

LRWC said it would utilize proceeds from the transaction for its core businesses.

The new agreement effectively amends the 2013 agreement.

In 2013, the LRWC Group entered into an agreement with the Belle Group which effectively granted the former an interest of up to 30 percent in  Belle Group’s net revenues under its lease and licensee agreements concerning City of Dreams Manila.

“Under the terms of this newly signed agreement, the LRWC Group will be able to finalize its transaction with the Belle Group by the end of March 2017. Thereafter, the March 13, 2013 agreements will be deemed terminated,” the two companies said.

Melco Crown CEO Lawrence Ho earlier reported that City of Dreams Manila registered net revenues of $120.2 million, up 36.3 percent year on year.

“We believe that the Philippine gaming market will continue to show robust growth as the country’s economy rapidly expands, infrastructure continues to improve and the government retains its strong commitment to support domestic and international tourism,” Ho said.

Belle, on the other hand, realized higher revenues from its lease of the land and buildings comprising City of Dreams Manila, which is operated by Melco Crown (Philippines) Resorts Corp.

Belle’s principal assets include land and buildings located at Entertainment City in Parañaque City, Manila. The property is being leased on a long-term basis to Melco Crown.

City of Dreams Manila covers 6.2 hectares of land and more than 30 hectares in building gross floor area.