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MANILA, Philippines – Leisure and Resorts World Corp. (LRWC) sold its City of Dreams Manila interest in consideration of Belle Corp., which is SM Group’s high-end property developer.
LRWC and Belle signed a deal that will enable the former company to pull in its interests under existing accord with the property developer.
The two companies disclosed the agreement to Philippine Stock Exchange (PSE). The agreement states that Belle will pay LRWC a total of P5.09 billion. The amount includes the compensation upon signing, which is P1.018 billion. By the end of March 2017, the balance will have been paid.
The company said that its core businesses will benefit from Belle agreement’s proceeds. The recent agreement alters the previous deal in 2013.
In 2013, the group entered a deal with Belle to have a grant of 30 percent interest in the latter’s net revenues. The agreement is under licensee and lease agreements concerning City of Dreams Manila’s gaming operations.
Melco Crown Chief Executive Officer, Lawrence Ho, stated that City of Dreams Manila booked $120.2 million net revenues, which is an increase by 36.3 percent against last year.
Ho added that the gaming market in the Philippines will further advance as the economy expands quickly, infrastructure projects push forward, and the administration continues to boost domestic and international tourism.
Belle earned higher revenues from its City of Dreams Manila’s rentals of land and buildings.
The principal assets of SM Group’s high-end property developer include Entertainment City lands and buildings, which are located in Parañaque City, Manila. The group leases to Melco Crown on a long-term basis.
City of Dreams Manila has a 6.2-hectare of land and over 30-hectare building gross floor area.
Belle had asked LRWC to join in operating its $1 billion integrated casino resort project, but later on decided to have Melco Crown instead.