Philippine Racing Club, Inc. (PRC) is spinning off its horseracing business to a wholly-owned subsidiary so it can fully focus on the development of its more valuable real estate portfolio.

In a disclosure to the Philippine Stock Exchange, the firm said it has formally decided to separate its horseracing business effective November 2022.

PRC said it is authorizing subsidiary Santa Ana Park Racing Club, Inc. (SAPRC) to pursue the application of a new horseracing franchise with the Congress of the Philippines in view of the expiration in October 2022 of the current horseracing franchise of PRC.

It added that, PRC will no longer pursue the renewal of its horseracing franchise under its own name. During its regular meeting on April 19, 2022, the Board of PRC unanimously resolved and approved such decision.

Starting November 2022, PRC will concentrate on its real estate development business while the horseracing business will be run and managed through its wholly owned subsidiary SAPRC.

“Management believes that this set-up will immediately bring economic benefits to both businesses.” PRC said.

Because it will no longer be engaged in horseracing, PRC said there will be a retrenchment of employees assigned to the horseracing business. PRC has about 175 regular employees but it has not identified at this time who may be affected by this event.

“This retrenchment will not impact the results of operation of PRCI for 2022 because the Retirement Fund has enough resources to cover the expected separation benefits of affected workforce,” the firm said.

As to the employees and workers who will be affected by the expected retrenchment, PRC said they will have a better chance of similar employment with SAPRC.

“Upon approval of a new franchise, SAPRC will basically take over the horseracing business of parent company PRC, SAPRC will require same operation and similar number of labor complement as that of PRC during its horseracing operation until October 2022,” PRC noted.

It added that, “Net impact in the revenues and expenses of horseracing operation in 2022 not significant. We do not expect any major deviation in the monthly revenues and expenses for 2022 compared with 2021.”

Under this expectation and with no horseracing operation in November and December 2022, the net financial impact on results of operation for the year is not expected to be material.

There will be no immediate significant impact on the financial condition of PRC in 2022. PRC remains the owner of the horseracing related assets even after the expiration of the horseracing franchise.

“As to the future arrangement on the use of the racetrack facility and the betting system, we do not know yet at this time. But any business arrangements that may be agreed will definitely be beneficial to both PRC and SAPRC,” PRC said.