Dennis Uy still keen on casino despite swelling debt

MANILA, Philippines — Davao-based businessman Dennis Uy is targeting to open his maiden casino resort in Cebu before the end of the year despite the difficult business environment brought about by the COVID-19 pandemic.

PH Resorts Group, the hospitality arm of Uy’s Udenna Group, said its Emerald Bay would target the growing gaming market in Asia, with Macau recording $36.6 billion in casino revenues in 2019.

Macau’s total casino revenues from 2015 to 2019 had a CAGR (compounded annual growth rate of 6.7 percent)

“The company believes that Emerald Bay will be able to take advantage of this strong demand by providing an attractive gaming option for Philippine and regional mass market and VIP players, with its combination of high-end design, varied gaming and non-gaming offerings, five-star amenities and high-quality customer service,” PH Resorts said.

Uy is optimistic Emerald Bay will be one of the Philippines’ premier integrated tourism resort and gaming complexes, offering a premium gaming experience to all of its customers.

“The company believes the Donatela Resort & Sanctuary will enhance the company’s five-star offerings and complement the establishment of Emerald Bay by offering additional upscale facilities to its gaming and non-gaming guests,” PH Resorts.

To be constructed in two phases, Emerald Bay is expected to be completed in the second quarter of 2022.

The first phase will have approximately 4,514 square meters of aggregate gaming floor area, with approximately 600 electronic gaming machines, 122 gaming tables, a five-star hotel, with  270 hotel bays, an open air promenade, five F&B outlets and a pool complementing a partially completed 300-meter long beach front that will be open to resort guests.

“The management team is pushing for a soft opening by the end of 2021, and will continue to increase its gaming capacity and hotel rooms starting 2022,” the company said.

The second phase is expected to have around 12,164 square meters of aggregate gaming floor area, a five-star hotel with approximately 780 hotel bays, including five villas, four pools and MICE facilities.

In terms of financing the massive development, PH Resorts said it obtained an advance of $42.5 million from Emerald, an offshore entity wholly-owned by Udenna.

The principal and interest totaling $60.3 million was originally due in 2021, but PH Resorts and Emerald agreed to extend the payment of the advance to April 30, 2022.

PH Resorts has total liabilities of P8.1 billion as of end-2020 from P7 billion in 2019.

To manage its liabilities, PH Resorts is negotiating with a lender to convert a bridge loan.

“The Group has an ongoing negotiation with its lender for the conversion of this bridge loan to a long-term project loan. The long-term loan was classified as a current liability as an accounting adjustment due to the delay in final lender approvals on the deferment of commencement of financial ratio testing as a result of enhanced community quarantine and work from home arrangements.

The Group’s lender confirmed that as of April 8, 2021, the Group is not considered in default and can classify this current liability as noncurrent in the next reporting period upon receipt of final lender approvals,” PH Resorts said.

PH Resort incurred a net loss of P342 million last year, a decline from P569.7 million in 2019, primarily due to lower pre-operating costs. This was in connection with continued construction activity in Emerald Bay.