The Suncity group is jacking up its stake in its Philippine subsidiary, Suntrust Resort Holdings (SUN), to ensure the completion of its Manila Bay casino amid jitters following the arrest of its owner, billionaire Alvin Chau, six months ago.
Alvin Chau’s $40M loan default, loss of control in Suncity won’t affect Westside City casino project – Suntrust
SUN agreed on June 10 to issue P6.4 billion convertible bonds (CB) to its sister firm, Summit Ascent (SA)Investments Limited, including payment of P340 million in interest.
This will increase Suncity’s combined stake in SUN from 51 percent to 68.07 percent (SA with 34.85 percent and Fortune Noble with 33.22 percent).
Its local partner, Megaworld of ultra bilyonaryo Andrew Tan, will have its stake diluted to 22.15 percent from 34 percent.
Suncity, however, assured that SA won’t fully convert its CB in order to keep its public float above the minimum 10 percent ownership requirement.
The CB will cover the loan extended by SA, which operates the Russian integrated resort Tigre de Cristal in Vladivostok, to SUN in February 2021 which was used to cover costs of its $1 billion Westside City hotel-casino project in the Manila Entertainment City which will have 450 rooms, 400 gaming tables and 1,200 slot machines.
Suncity decided to convert the SA loan into equity in SUN in order to avoid a default which could affect its ability to borrow more to finish its casino project.
The approval of the CB should ease concerns on the financial resources of SUN following the arrest of its ultimate owner, junket king Chau, for illegal cross-border gambling and money laundering.
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