Bloomberry Resorts Corporation, billionaire Enrique K. Razon Jr. leisure and gaming business, reported that its subsidiaries have signed a P72.0 billion Syndicated Refinancing Facility with a group of banks.
In a statement, Bloomberry said the agreement was signed by its subsidiaries Bloomberry Resorts and Hotels, Inc. (BRHI), as borrower, and Sureste Properties Inc. (SPI), as surety and third party security provider.
The new facility replaces the existing P73.5 billion Syndicated Term Loan Facility obtained in 2018 and the P20 billion additional term loan facility that BRHI obtained in December 2020.
The P72.0 billion Syndicated Refinancing Facility provides for a term of 10 years, until October 2034.
The refinanced loan maintains a back-ended principal payment schedule, similar to the structure of its predecessor. More than 65 percent of the balance will come due in the last five years of the facility.
The updated loan is priced at a spread that is 75 basis points lower than the previous facilities and gives the option to fix the interest rate within the next 12 months.
This feature will allow Bloomberry to benefit from further interest rate cuts that are expected to be implemented in the coming months.
Razon, Bloomberry chairman and CEO, said ”We view this refinancing as a positive development that will allow the company to lighten its debt service and preserve cash as Solaire Resort North ramps-up, improve the company’s bottom line, and ultimately ensure the consistent return of capital to our shareholders in the coming years.”
The syndicate of lenders include BDO Unibank, Inc., Bank of the Philippine Islands, China Banking Corporation, and Philippine National Bank.
BDO Capital and Investment Corporation served as lead arranger and sole bookrunner while BDO Unibank, Inc. – Trust and Investments Group is the security trustee, facility agent, and paying agent.
BRHI recently acquired 1.94 million Bloomberry shares on August 19, 2024 at prices ranging from P7.50 to P7.70 per share with the bulk of 1.18 million shares priced at P7.70 apiece.
“These shares shall be given as a reward to Solaire's loyal patrons and as part of Solaire's marketing program,” Bloombery said.
Bloomberry reported a 38 percent drop in consolidated net income to P3.97 billion in the first half of 2024 from the P6.42 billion posted in the same period last year.
This is due to lower earnings from Solaire Resort Entertainment City (SEC) and losses of the newly-opened Solaire Resort North (SN) and Jeju Sun Hotel & Casino (Jeju Sun).
Excluding the impact of gains from the disposal of an asset and the liquidation of a subsidiary, net income would have decreased by 35 percent year-over-year in the first six months of 2024.
“In the second quarter and first half of 2024, our mass gaming revenues across two properties increased year-over-year despite the very high base set in the first half of 2023.
“However, continued weakness in the VIP segment as well as pre-operating and operating expenses at Solaire Resort North resulted in a decline in consolidated EBITDA and net income,” said Razon.
He added that, “Despite our weaker consolidated year-over-year performance, I am pleased to report that Solaire Resort North recorded positive EBITDA of P250 million in its first 37 days of operations.