Universal Entertainment halts backdoor listing for Okada Manila operator

Jenny Ortiz December 9, 2024

SiGMA news

Universal Entertainment Corp., a Tokyo-listed conglomerate and parent company of Okada Manila’s operator, Tiger Resort, Leisure and Entertainment Inc. (TRLEI), has abandoned plans for a backdoor listing on the Philippine Stock Exchange (PSE). Over the weekend, Universal Entertainment of Tiger Resort Asia Ltd.’s (TRA) 66.67 percent stake in Asiabest Group International Inc. (ABG) to real estate developer PremiumLands Corp. for PHP510.4 million (€8.33 million).

TRA, a subsidiary of Universal Entertainment, had initially acquired ABG shares in 2019 with the intent to use the listed company as a vehicle for a backdoor listing of TRLEI. However, the parent company stated that steady financial growth at Okada Manila made the listing through ABG unnecessary, prompting the decision to divest its stake as part of a “business portfolio transformation.”

Shift in listing strategy for Okada Manila

Universal Entertainment’s decision reflects a shift in its listing strategy for Okada Manila, one of the largest integrated resorts (IR) in the Philippines. Earlier this year, media reports suggested the company might pursue an initial public offering (IPO) for Okada Manila in 2025, with a target valuation of between US$500 million and US$750 million. The backdoor listing approach was officially shelved with the sale of TRA’s shares in ABG.

Previously, Universal Entertainment had also explored a potential merger with the U.S.-based special purpose acquisition company (SPAC) 26 Capital Acquisition Corp. to list on NASDAQ. However, this agreement was terminated last year, adding further uncertainty to the company’s future listing plans.

Financial performance and market challenges

Despite Universal Entertainment’s positive assessment of Okada Manila’s performance, recent financial data indicates challenges. For the first nine months of 2024, Okada Manila recorded gross gaming revenue (GGR) of PHP25.84 billion (€421.7 million), a decline of 26.6 percent year-on-year. Adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) dropped by 44 percent to PHP5.57 billion (€90.9 million) over the same period.

Universal Entertainment also revised its 2024 full-year outlook, anticipating losses due to market uncertainties. The company cited declining VIP customer numbers across the Philippine casino market as a key factor affecting revenue. This trend is expected to persist, posing additional hurdles for the integrated resort sector.

Prospects for Okada Manila

While the sale of TRA’s stake in ABG signals an end to immediate backdoor listing plans, Universal Entertainment has not ruled out other avenues for listing Okada Manila. The company’s long-term strategy may still include IPOs or alternative approaches to leverage the resort’s position in the competitive Philippine gaming market.

“Should any matters that merit disclosure, including publicly listing TRLEI, arise in the future, the Company will promptly provide notification of those matters,” Universal Entertainment said in the notice.

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