IPO update: Resorts World Manila (Travellers Group)

James Ryan Jonas

After deferring its initial public offering (IPO) early this year, hotel and casino operator Travellers International Hotel Group is finally pushing through with the IPO this month.

The operator of gaming center Resorts World Manila (RWM) originally planned to conduct the IPO in July 2013 but decided to temporarily shelve it following concerns on the Federal Reserve’s tapering of the quantitative easing program.

Shares Offered and IPO Price

Travellers Group has now revived its IPO plan, with the company planning to offer to the public up to 1.57 billion primary shares with an over-allotment option of up to 235.98 million shares.

Shares are priced no more than P11.88 per share, down from the P23.38 price per share announced during its original IPO plan.

The offer period runs from October 22 to 29. The final IPO price will be determined and announced on October 17.

If all shares, including the over-allotment portion, are sold at the maximum price, the company stands to gain more than P21.46 billion from the IPO.

Usage of IPO Proceeds

According to the company, proceeds will be used for the Phase 2 and Phase 3 expansion of the Resorts World Manila hotel and recreation center.

More than P8.1 billion will be used for Phase 2 expansion which involves constructing the Marriott West Wing and the Marriott Grand Ballroom.

Around P9.7 billion, meanwhile, will be spent for Phase 2 expansion which will extend Maxims Hotel and add the Hilton Manila and Sheraton Hotel Manila hotels to Resorts World Manila.

Stock Ticker and Listing Date

The company, upon commencement of trading on the PSE, will use RWM as stock code.

It will be listed on the PSE and start trading in November 5.

Company Profile

Travellers International Hotel Group is a joint venture between the world’s third-largest cruise line operator Genting Hong Kong and the Andrew Tan-led conglomerate Alliance Global Group Inc. (AGI).

It currently manages and operates the 12-hectare Resorts World Manila, which boasts of 300 tables and more than 1,800 slot machines.

Travellers Group will also be the owner and operator of the $1.1-billion Resorts World Bayshore casino complex to be developed inside the Entertainment City, a 120-hectare property in Pasay City reclaimed from Manila Bay.

Revenues and Net Income

In 2012, Travellers Group booked total net revenues of P29.078 billion, up 10.4% from 2011.

Its 2012 net income was P6.73 billion, an increase of 40% from the 2011 net income of P4.82 billion.

In the first six months of 2013, Travellers Group earned revenues of P17.41 billion and booked a net income of P2.31 billion.

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James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.