By Revin Mikhael D. Ochave, Reporter
DENNIS A. UY-LED Udenna Corp. has signed a memorandum of understanding (MoU) with the listed construction company EEI Corp. for a potential partnership in the planned Emerald Bay Resort and Casino Project in Mactan, Cebu.
The MoU allows for a potential partnership between EEI and PH Resorts “upon the execution of the definitive agreements and subject to the fulfillment of conditions precedent and regulatory approvals, if any,” Udenna’s listed gaming and hospitality subsidiary PH Resorts Group Holdings, Inc. said in a disclosure on Monday.
“The MoU also paves the way for EEI to execute an agreement with PH Resorts and/or its subsidiaries, Lapulapu Leisure, Inc. and Lapulapu Land Corp., to finance, construct, and complete the Emerald Bay Project, upon the execution of definitive documentation,” PH Resorts said.
In July, Okada Manila operator Tiger Resort Leisure & Entertainment, Inc. (TRLEI) ended talks to acquire a majority stake in the Emerald Bay project.
TRLEI is the third group to withdraw its investment plan from the Emerald Bay project, after Razon-led Bloomberry Resorts Corp. and Cebu-based AppleOne Properties, Inc.
The Yuchengco group currently owns about 20.9% of EEI. Its listed conglomerate, House of Investments, Inc. (HI), previously sold its 20% stake in EEI to the Romualdez family-led firm RYM Business Management Corp. for P1.25 billion.
HI also sold its 14.346% stake in EEI to Industry Holdings and Development Corp. for about P1.08 billion.
EEI is one of the largest construction and contracting firms in the Philippines.
“It looks like PH Resorts finally found a white knight to save its Emerald Bay project. From the limited details disclosed, it appears that EEI might ultimately end up taking control and substantial ownership of the project, with PH Resorts probably left with a minor economic stake,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
“Naturally, one of the questions in the minds of public shareholders is whether this MoU will see the light of day, as attempts to do a deal with previous suitors all fell through. Hopefully, this one will be realized to unlock the value of the Cebu property,” he added.
On the other hand, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said investors should exercise caution following the announcement.
“I think it’s a bit too early to be excited about any prospects for PH Resorts given its history of failed deals,” he said.
“At this point, too many details of the supposed deal are unclear. For example, the disclosure stated that EEI will finance, construct, and complete the project but it is unclear what they will get in exchange: ownership stake, or eventual payment,” he added.
On Monday, PH Resorts shares fell by 20.25% or 16 centavos to 63 centavos apiece, while EEI shares rose by 2.77% or nine centavos to P3.34 each.