New Rules Regarding PSE-Delisting Companies Could Derive From the Casino Operation Deal of Suncity and Travellers International

Last week, Travellers International Hotel Group, an integrated resort operator based in the Philippines, revealed that it has provided Suncity Group with rights to operate its casino and hotel assets in the Westside City Resorts World. This announcement, however, could lead to the implementation of new rules regarding some governing operators that have been planning to remove their listing from the Philippine Stock Exchange (PSE).

The multi-party deal, called a Co-Development Agreement, is a complicated one. Under the provisions of the above-mentioned agreement, the project site where Westside City Resorts World’s main casino and hotel is situated would be leased to Suntrust Home Developers Inc. Furthermore, it was revealed that Suncity has taken over 51% in Suntrust after a series of transactions that were completed in the preceding days.

Currently, the Philippine Stock Exchange is reviewing the legality of the Suntrust’s controlling stake acquisition. The details about the recently announced decision of Travellers to delist from the PSE, however, could be more pressing, according to Nicky Franco, head of research at Abacus Securities Corp. As he explained, the fact that Suntrust has received the right to build and operate the casino and hotel is surprising, especially considering the fact that the announcement was made only a month after Resorts World Manila’s delisting from the PSE.

New Rules Could Be Implemented for Transactions and Share Value During Delisting Process

For the time being, Travellers International Hotel Group operates as an Alliance Global Group and Genting Hong Kong’s joint venture. It is one of the two casino operators based in Manilla which have removed their listing from the Philippine Stock Exchange since June 2019, following Melco Resorts & Entertainment’s suit.

Now, according to reports, some new rules regarding the delisting process could be implemented in regards to those transactions and the share value when similar circumstances arise in the future. One of the commissioners at the Securities and Exchange Commission that operates as a regulatory body, Ephyro Amatong, said that the fairness of the delisting process is one of the paramount priorities of both the Commission and the PSE.

As the Philippine Star reported, the President of the Shareholders Association of the Philippines has shared there is more work that has to be done in order for the minority shareholders’ rights to be efficiently protected at a time when a certain company wants to remove its listing from the PSE. According to Francis Lim, the country’s Stock Exchange may want to consider implementing some rules amendments in terms of the delisting process. As part of these rules, a super majority vote could be required both by the stockholders and the company’s board of directors in order for the entity to be delisted.

Furthermore, Mr. Lim shared that the PSE may also impose a minimum tender offer price but that matter would take further consideration because the best option for the local stock market should be chosen.

Suncity Group Holdings Expands Global Presence by Manila Casino Operation Deal

The end of October saw Suncity Group Holdings reveal that it planned to expand its global presence to the gambling market of the Philippines thanks to a deal to operate a casino and hotel resort in the country.

The recently announced agreement came as the first step towards expansion in Manila’s gambling sector that has been subject to rapid growth over the past ten years. According to the executive director of Suncity, Andrew Lo, Manila has been the most “decent” city for gaming outside of Macau mostly due to a large number of foreign visitors who come and go every year.

As mentioned above, Suntrust released a statement informing that it inked a deal under which it would be able to develop and exclusively operate the main hotel casino facilities of an integrated resort that is set to be hosted in Manila. The casino is expected to feature around 400 gaming tables and 1,200 slot machines with regular and high-roller options set to be available. There would be at least 400 rooms in the hotel.