Corporate News

By Keith Richard D. Mariano, Reporter

Razon-led Bloomberry sells casino in Jeju Island

Posted on June 24, 2016

BLOOMBERRY RESORTS Corp. is abandoning its casino operation in South Korea’s Jeju Island, just 15 months after its acquisition.

In a disclosure to the Philippine Stock Exchange on Thursday, the casino business of tycoon Enrique K. Razon, Jr. announced that subsidiary Solaire Korea Co. Ltd. has agreed to sell its 96.23% shareholding in Golden & Luxury Co. Ltd., the owner and operator of Jeju Sun Hotel & Casino.

Iao Kun Group Holding Company Limited, through a subsidiary, will acquire the shareholding in Golden & Luxury, for 117.5 billion South Korean won or roughly P4.75 billion.

The purchase price covers the shareholder’s loan. Iao Kun will make an initial deposit of 10 billion won, which will remain in escrow for 45 days. The agreement provides for a 4-billion won holdback as security for contingent liabilities until Oct. 22, 2017.

“The agreement is subject to several conditions including the satisfactory results of a due diligence that Iao Kun will conduct on the shares to be sold, G&L, and its assets and business,” Bloomberry said.

In addition, the transaction will require the approval of South Korea’s gambling regulator and other government authorities.

Bloomberry said it will disclose the details of the sale “if and when” the transaction gets completed within the next 45 days.

The Philippine-incorporated casino operator acquired the control over Golden & Luxury, along with the 20.96-hectare Silmi Island, in March 2015. This shortly followed the acquisition of a 12.2-hectare property in Muui Island in January.

In the disclosure, Bloomberry noted: “Iao Kun desires to enter into the Jeju market and is confident that it can attract its Chinese VIP customers to Jeju Island. Solaire Korea, on the other hand, intends to focus its effort on the development of its property in Muui and Silmi Islands.”

Jeju Sun Hotel & Casino is among the eight casinos in the South Korean island catering to foreigners exclusively.

Last November, South Korea’s gambling regulator imposed a one-month suspension on the gambling operations of Jeju Sun due to tax violations of the previous owner. The hotel’s operations were not affected.

Bloomberry swung to a net loss of P3.38 billion, from a net profit of P4.07 billion, last year. This was partly brought by a P998-million loss from its operations in South Korea, which only accounted for a little over 1% of total revenues.

The listed operator of Solaire Resort & Casino remained in the red during the first quarter, widening its net loss to P1.16 billion from the P533 million recorded a year earlier. Operations in South Korea weighed the company’s earnings down by P198 million.

Shares in Bloomberry closed 6 centavos or 1.01% lower at P5.90 apiece on Thursday.