DigiPlus Interactive Corp. said the P12 billion it needs for the acquisition of Hong Kong-listed International Entertainment Corp. (IEC) will be internally funded, as the company forays into land-based gambling arena.
DigiPlus President Andy Tsui said the company may also tap bank financing for a portion of the amount, but the company, he said is ‘sitting on a cash pile of over P19 billion.’
‘So, we do expect that we have sufficient internal funds but if we need it we can also explore some short-term financing.’
Tsui said DigiPlus expects to complete the arrangement with IEC within eight to nine weeks as its shareholders approve the agreement. The first payment will then be made in early January 2026 and the second payment in April, according to Tsui.
DigiPlus announced that it has signed a HK$1.6-billion (approximately P12 billion) convertible notes agreement with IEC.
The five-year notes carry an interest rate of 3 percent, and the rights to acquire a 53.89 percent economic stake in IEC.
If DigiPlus chooses not to convert, the notes will instead be redeemable at 108 percent at the end of the five-year maturity, it said.
Tsui said if DigiPlus manages to acquire IEC, it will further establish its foothold in the mass market gaming in the Philippines, as New World Hotel Manila’s location is in the heart of Manila.
‘Number two, we see the competition in the Entertainment City is getting very intense and the growth rate is kind of declining as well. So we think that if we position ourselves in like Malate area, we could achieve much stronger growth because there’s only one casino or integrated resort in that area,’ he said.
‘Of course, the cost of investment is much lower to enter into a land-based casino in the Malate area versus anyone else in the Entertainment City. It will cost at least $1 billion or more for the entire complex in Entertainment City. So, I think that’s why we decided to go with IEC because we will have a chance to own the majority ownership around 53.9 percent.’
Tsui said DigiPlus is working with a lawyer to apply for a whitewash waiver that will allow its IEC acquisition without triggering a tender offer to other investors of the company.
Eusebio H. Tanco, the company’s chairman, said they went for the IEC deal instead of pursuing the City of Dreams (COD) Manila, which is reportedly is up for sale.
The IEC deal will have assets instead of the COD Manila where they can only rent the place for a certain period as the current owners, the SM Group, does not intend to cede control of the property.
On DigiPlus eventually becoming a dual listed company, since IEC is also listed in Hong Kong, Tsui said, ‘we don’t have that idea yet’.
‘But we’re open because the benefit of having a Hong Kong-listed company it will enlarge our investor base we can tap into a lot of international investor with higher liquidity so now we’re focusing on the integration first.’
DigiPlus said the first HK$800 million tranche, will be completed upon satisfaction of customary conditions, while the remainder will follow within three months of the first completion, subject to mutually agreed terms between the parties.
‘At the same time we also have to obtain approval from PCC [Philippine Competition Commission] for the acquisitions. So, that might take maybe six to nine months, we still don’t know what the time is on that one. So, until we finish the payment and the approval process then we can consider to convert.’
IEC owns and operates the 203-key New Coast Hotel Manila, an integrated hotel and casino complex located in Malate, licensed by the Philippine Amusement and Gaming Corp.
Formerly known as New World Hotel Manila, it rebranded to its new name in in 2020. New Coast Hotel Manila also operates 96 gaming tables, 495 slot machines and a range of other gaming amenities.