Jeju exit in sight as Bloomberry inks sale agreement for casino unit – BusinessWorld Online
RAZON-LED Bloomberry Resorts Corp. has found a buyer for its casino business in South Korea, which analysts said could help strengthen its earnings outlook.
In a disclosure to the stock exchange on Monday, Bloomberry said its indirect subsidiary, Golden & Luxury Co., Ltd., has signed a share purchase agreement with Gangwon Blue Mountain Co., Ltd. to spin off and sell its casino business.
The buyer has made a down payment of 500 million Korean won (around P20.48 million), the company said. The completion of the transaction is subject to regulatory approvals.
Golden & Luxury operates Jeju Sun Hotel & Casino, located on Jeju Island, one of South Korea’s major tourist destinations.
“The divestment is intended to cut losses and rechannel corporate resources to the Philippine operations. This is a positive development for Bloomberry because it will be shedding a losing business,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
Jeju Sun’s gross gaming revenue (GGR) dropped 93% in the second quarter to P2.5 million from P35.7 million in the same period last year, Bloomberry data showed.
COL Financial gaming analyst Richard Laneda said the sale could generate gains for Bloomberry.
“In terms of the financial impact of the transaction, the casino license has already been fully impaired last year so there would be no one-off loss on that, but there is likelihood that BLOOM will book a gain from the other assets like the casino building and gaming equipment,” he said.
Bloomberry posted a P1.4-billion net loss in the second quarter, reversing the P1.3-billion net profit recorded a year earlier. Its total GGR also eased 1% to P14.3 billion, reflecting weaker demand in its VIP and premium mass segments.
The company operates Solaire Resort Entertainment City in Parañaque and Solaire Resort North in Quezon City.
At the local bourse on Monday, Bloomberry shares fell by 2.76% or nine centavos to close at P3.17 apiece. — Beatriz Marie D. Cruz