Two parties express interest in acquiring stake in City of Dreams Manila

Macau-based Melco Resorts & Entertainment Ltd. is in discussions with two potential buyers or investors for its City of Dreams Manila integrated resort, according to executives from the SM Group, which owns the property through Belle Corp. and Premium Leisure Corp. (PLC).

SM Investments Corp. (SMIC) President and CEO Frederic C. Dybuncio confirmed during a media briefing that there are currently “one or two” parties expressing interest in the property. “So far, nothing definite has happened yet,” Dybuncio said, noting he is not privy to whether the interested parties are gaming operators or private equity investors. “If they cannot sell it at the price they want, they should continue the business,” he added.

Melco announced earlier this year that it is “evaluating potential strategic alternatives” for City of Dreams Manila and has engaged CBRE Capital Advisors, Inc. and Moelis & Co. LLC as financial advisors to assist with the process. The resort is operated by Melco Resorts Leisure (Philippines) Corp. under an agreement with Belle Corp. and PLC’s wholly owned subsidiary, Premium Leisure and Amusement, Inc., which holds the casino license.

Dybuncio also revealed that SMIC is exploring entry into the online gaming market through the Philippine Inland Gaming Operator (PIGO) license that accompanies PLC’s physical gaming license. “We’re thinking of setting up our own online gaming, but we put that on pause to see what happens to the regulations,” he said. He added that the company is hopeful regulatory developments will be favorable and help strengthen physical gaming operations.

City of Dreams Manila is a strong player in the mass-market segment, ranking second in both table games and slot machines behind Solaire Resort & Casino, Okada Manila, and Newport World Resorts. Dybuncio stressed that the property focuses on the mass market rather than VIP and junket players, which are not part of PLC’s core business.

Under its arrangement, Belle Corp. earns rental income from Melco for the use of the property and also benefits from a share in City of Dreams Manila’s gaming revenues through its 99.55 percent stake in PLC. Belle also holds around 1.5 hectares of undeveloped land near the resort.

Dybuncio emphasized that Belle has no exposure to the casino’s financial losses. “We only share in the profits, never in the losses. The worst that could happen is zero income in a month — but that has never happened,” he said.