Emerald Bay’s future: a deal in jeopardy or a misunderstanding??

Lea Hogg June 24, 2024

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Emerald Bay’s future: a deal in jeopardy or a misunderstanding??

PH Resorts Group Holdings Inc., the company behind the Emerald Bay gaming resort project in Mactan, Cebu, has recently refuted media claims about the potential collapse of its ongoing negotiations with the Okada Manila casino resort’s promoter. The media report, published on a Friday, suggested that the discussions were on the brink of failure, a characterization that PH Resorts has labelled as “inaccurate.”

In a statement released to the Philippine Stock Exchange on the following Monday, PH Resorts clarified the status of the negotiations. The company affirmed that the involved parties are actively working on the transaction with the Okada group. The discussions are ongoing, and the target date for closing the deal, as mentioned in the media report, remains set for July.

The company further addressed the media’s claim about a disagreement over commercial terms, specifically the ‘unrealistic terms’ allegedly set by the selling party. PH Resorts dismissed this assertion as largely baseless and not reflective of the current discussions between the relevant parties.

At the helm of PH Resorts is Dennis Uy, (pictured above), a renowned entrepreneur from the Philippines. On the other side of the negotiating table is the Japan-based Universal Entertainment Corp, which controls Tiger Resort, Leisure and Entertainment Inc (TRLEI). TRLEI is responsible for the operation of the Okada Manila complex in the Philippine capital.

Intricacies of a stalled project

The media report in question, published by InsiderPH.com, cited industry insiders who suggested that the Okada Group’s rescue of Uy’s stalled $300-million Emerald Bay casino was on the verge of collapse. The report attributed this to a disagreement on commercial terms.

However, the report also highlighted that the issue was not with the project’s viability but rather with the ‘unrealistic’ terms set by the selling party. According to one insider, Uy was seeking a premium for his remaining stake in the project and repurchase rights after he sold and leased back the project land to settle massive debts owed to the Sy family-led China Banking Corp.

In a December filing, Universal Entertainment announced that one of its units would acquire a majority stake in the Emerald Bay project and complete the partially developed integrated resort (IR). The deal was expected to be finalized this July.

In April, PH Resorts revealed that one of its subsidiaries had received an initial non-refundable payment of PHP300.1 million (US$5.2 million) towards the cost of a stock subscription. This would result in the majority ownership in the operating interest for Emerald Bay passing to TRLEI.

As the situation unfolds, observers are keenly watching to see if the deal can be salvaged or if Uy’s casino plans will fall through. At one point, PH Resorts was in discussions with Philippine casino operator Bloomberry Resorts Corp about a potential investment in several PH Resorts casino schemes. However, these talks concluded without a deal.

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