PHR has been searching for a white knight to help finish its stalled $300 million Emerald Bay casino project in Mactan, Cebu, which is located near the Mactan Cebu International Airport, the country’s second-busiest gateway.
PHR shares saw an unexplained surge in the days leading up to the announcement, with the stock price rising from P0.50 at the start of December to a peak of P0.87 amid speculation over investment talks.
Following the announcement, PHR shares plummeted 20.25 percent, closing at P0.63 per share on Monday.
EEI is the fourth potential investor in Emerald Bay.
The Emerald Bay project is envisioned to feature a five-star hotel and a large-scale gaming floor with more than 700 electronic gaming machines and over 140 tables.
It remains unfinished due to PHR’s financial struggles, which include P272.6 million in losses during the first nine months of 2024, down from P2.1 billion last year.
On Monday, PHR said it signed a memorandum of understanding with EEI for the Emerald Bay project.
EEI, previously controlled by the Yuchengco family behind Rizal Commercial Banking Corp., has taken on new investors over the past year.
These include RYM Business Management Corp. of House Speaker Martin Romualdez, the cousin of President Ferdinand Marcos Jr., and Francis Chua’s Industry Holdings and Development Corp.
Failed talks
PHR has held talks with several potential parties in the past, including billionaire Enrique Razon’s Bloomberry Resorts Corp., the Manigsaca family’s AppleOne Properties, and the Okada Group behind the Okada Manila integrated resort, but those discussions failed to materialize.
PHR is expected to return Razon’s P1 billion down payment by the end of 2024. It also pocketed a P327.6 million non-refundable payment from Okada’s Tiger Resort Leisure & Entertainment before their discussions ended.
EEI may finance, complete the project
“In particular, the MOU provides an avenue for a potential partnership between EEI and PHR, upon the execution of the definitive agreements and subject to the fulfillment of conditions precedent and regulatory approvals, if any,” PHR said.
“The MOU also paves the way for EEI to execute an agreement with PHR and/or its subsidiaries, Lapulapu Leisure, Inc. and Lapulapu Land Corp., to finance, construct, and complete the Emerald Bay Project, upon the execution of definitive documentation,” it added.
Deal expert’s view
“From the limited details disclosed, it appears that EEI might ultimately end up taking control and substantial ownership of the project, with PHR probably left with a minor economic stake,” Juan Paolo Colet, managing director at China Bank Capital, said on Monday.
“Naturally, one of the questions in the minds of public shareholders is whether this MOU will see the light of day, as attempts to do a deal with previous suitors all fell through. Hopefully, this one will be realized to unlock the value of the Cebu property,” he added.
Unanswered questions
“I think it’s a bit too early to be excited about any prospects for PHR given its history of failed deals,” Alfred Benjamin R. Garcia, research head at AP Securities Inc., said in a text message.
“At this point, too many details of the supposed deal are unclear. For example, the disclosure stated that EEI will finance, construct, and complete the project, but it is unclear what they will get in exchange: ownership stake, or eventual payment?” he added.
Cebu a hotspot for casino resorts
If the project proceeds, Emerald Bay will be the province’s second major integrated casino after the Gokongwei Group’s Nustar Resort, which is located across the Mactan Channel in Cebu.
Last August, InsiderPH reported that tycoon Kevin Tan-led conglomerate Alliance Global Group (AGI) —the operator of the Newport World Resorts in Manila—plans to develop a casino project in the 30-hectare Mactan Newtown township, also located in Mactan Island.
“AGI’s planned casino nearby is expected to impact Emerald Bay’s viability,” Garcia said.
“This is especially true if it opens earlier than Emerald Bay, as it will get first mover advantage. On the other hand, having choices might attract high rollers to the area,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
