Okada bets the house to finish Manila casino as backdoor listing shelved
The Okada Resort has literally bet the house just to finish its $2.4-billion casino resort project in Manila.
According to its Tokyo headquarters, Okada Manila this week borrowed 33 billion yen (about $308 million) payable in one year, with a possible extension of six months, at five percent interest rate.
That interest rate is incidentally more than double the current 2.4084 percent US dollar one-year LIBOR rate. The fresh loan came after last week’s disclosure that Okada Manila’s operating loss for the nine months ending 2017 hit P4.45 billion due to higher expenses.
In exchange for the loan, the Japanese parent said it had pledged a whopping 51 percent of the Manila casino resort to lenders identified as Baraja Investors Ltd. and Mangkon Road Ltd.
According to the grapevine, the short-term borrowing came after the backdoor listing route being worked out for Okada Manila by investment banker Lauro Baja III of UBS failed to pan out. In any case, according to the pro-Okada grapevine, the backdoor listing option is still on the table, and – this should warm the cockles of many a punters’ hearts – may finally happen by early next year.
The Japanese parent company had originally planned to finance out of its pocket 63 percent of the Okada project cost, which at 44 hectares is nearly three times bigger than the 16 hectares of Solaire casino resort.
But, per the Japanese parent’s own accounting, Okada Manila had already used other people’s money to fund the entire project cost – $308 million this year, $600 million in 2016, $600 million in 2015, and P37 billion in 2016, to be exact.
Placed by Deutsche Securities, the twin $600 million in private notes have yields of 8.5 percent and 12 percent, and will come home to roost by August 2020.
And that P37 billion loan – P37.6 billion, five-year-loan was the original announcement – was provided by BDO and carries a floating interest rate.
The bank of taipan Henry Sy, in exchange, had demanded an undetermined number of hectares from the Okada site as collateral, just as it did with the Solaire project, especially since the Tokyo parent only had a declared capital stock of “98 million yen”.
That is just about P47.6 million, no kidding.
Manila Hotel wins champagne battle
The Manila Hotel has won the right to keep the champagne name in its Champagne Room despite the opposition from the French trade association, Comite Interprofessionnel du vin de Champagne.
The Philippine trademark office has ruled that the word champagne has become generic and that, in fact, a number of leading hotels of the world like the Marbella Club in Spain, Connaught London, South Beach Miami, Venetian Las Vegas, and Grand Hyatt Hong Kong have their own respective Champagne Room or Champagne Bar.
Heard through the grapevine
The Year of the Dog has unfortunately bitten another Delgado clan member, after that Miascor mauling.
Delbros chief executive Jose Eduardo “Jed” Delgado is fighting, through Paner Hosaka Law, to quash a tax evasion charge and to suspend his arraignment scheduled for next week.
CORRECTION: Monday’s column had inadvertently used the photo of Nickel Asia chairman Manuel Zamora Jr. to identify his brother, PT&T chairman Salvador “Buddy” Zamora II.
Our apologies to the two gentlemen.
E-mail: moneygoround. manila@yahoo.com