Philippines-listed Suntrust Home Developers has issued convertible bonds totaling a combined Php12.9 billion (US$269.5 million) to entities of Hong Kong’s Suncity Group and Summit Ascent as it accelerates preparations to develop a US$700 million hotel and casino at Manila’s Westside City Resorts World.
According to concurrent Monday filings, the bonds were issued on 30 December 2020 and include Php7.3 billion (US$152.0 million) zero coupon convertible bonds to Suncity Group subsidiary Fortune Noble Limited with a maturity date of 30 December 2025.
The subscription price, Suntrust confirmed, will be used for development of its Manila hotel project, including around 400 hotel rooms of which standard rooms will range from 34 to 39 square meters, and a casino comprising 400 gaming tables and 1,200 slot machines for both the mass and VIP markets.
Fortune Noble is controlling shareholder of Suntrust with a 51% stake and can increase its interest to 74.60% upon conversion of the bonds, although doing so would see Suntrust’s public float fall from 14.33% to 7.48% and therefore below the Philippine Stock Exchange’s minimum public float requirement of 10%.
“If Fortune Noble opts not to convert the Convertible Bond into Conversion Shares then the amount of the Convertible Bond becomes a debt payable under the terms of the Convertible Bond Subscription Agreement,” Suntrust said.
The remaining Php5.6 billion in convertible bonds have been issued to Summit Ascent Holdings subsidiary Summit Ascent Investments Limited at Php1.80 per conversion share, representing a premium of 56.52% over the closing price of Suntrust shares on the previous day to completion of the agreement.
Summit Ascent Holdings, majority-owned by Suncity Group, controls Russian casino-resort Tigre de Cristal in Vladivostok.
Should the company opt to convert its bonds to shares, Summit Ascent would claim a 30.03% stake in Suntrust but would allow for the public float to remain marginally above the minimum requirement at 10.03%.
Suncity Group has previously stated its intention to hold a soft opening of its Manila hotel and casino project by the end of 2022, followed by a grand opening in 2023.