SUNTRUST Home Developers, Inc. is selling more shares in the company to Hong Kong-based firms to fund the construction of its hotel casino project in Parañaque City.
In disclosures to the stock exchange Wednesday, the listed company said it is finalizing its application with the Securities and Exchange Commission (SEC) to sell P7.3-billion and P5.6-billion convertible bonds to Fortune Noble Ltd. and Summit Ascent Investments Ltd., respectively.
For its deal with Fortune Noble, Suntrust entered a subscription agreement on May 29 to issue P7.3-billion convertible bonds that will be subscribed to by Fortune Noble. Suntrust committed to get the approval of the SEC on or before July 31. After the transaction, Fortune Noble’s ownership of Suntrust will increase to 74.42%.
To recall, Fortune Noble bought shares in Suntrust last year and currently holds a 51% stake in the firm. This diluted Megaworld Corp.’s ownership of Suntrust to 34%.
Fortune Noble is a wholly owned subsidiary of Suncity Group Holdings, Ltd., a Hong Kong-listed company engaged in leisure and entertainment.
Suntrust said the proceeds from selling convertible bonds to Fortune Noble will be used in the development of its five-star hotel casino project in Parañaque City. After the transaction, Megaworld’s ownership of Suntrust will be reduced to 17.75%.
Fortune Noble may convert the bonds into 6.64 billion common shares at the initial conversion price of P1.1 each, representing about 47.79% of Suntrust’s enlarged issued share capital. But if Fortune Noble chooses not to turn the bonds into conversion shares, the amount of the bonds will become debt.
For its deal with Summit Ascent, Suntrust will issue P5.6-billion convertible bonds to be subscribed to by the Hong Kong firm. Suntrust is tasked to obtain the approval of the SEC on or before September 30.
After the transaction, Fortune Noble’s ownership of Suntrust will be 35.69%, Summit Ascent’s ownership will be 30.03% and Megaworld’s ownership will be 23.79%.
Summit Ascent is a Hong Kong property development firm under Summit Ascent Holdings Ltd., where Suncity holds approximately 24.74% direct and indirect interest.
Summit Ascent may convert the bonds into approximately 3.11 billion common shares in Suntrust, representing about 30% of its issued and outstanding capital stock upon conversion. But similar to its deal with Fortune Noble, Suntrust said the amount of the convertible bonds will become debt if Summit Ascent opts not to convert them into conversion shares.
Proceeds from selling the convertible bonds will also be used to support the construction of Suntrust’s hotel casino project. It is envisioned to have 400 hotel rooms, a casino establishment with 400 gaming tables and 1,200 slot machines, and a parking facility with 960 slots. It will be erected at the Manila Bayshore Integrated City as part of Megaworld’s Westside City.
Shares in Suntrust at the stock exchange inched up three centavos or 2.36% to P1.30 each on Wednesday. — Denise A. Valdez