Genting HK: A Philippine lawmaker has called the contracts awarded to 4 groups of companies developing the US$5bn Manila Bay Integrated City by the Philippine Gaming & Amusement Corp (Pagcor) illegal as it was awarded without public bidding. Pagcor has responded to the game & amusement committee that the contracts would be reviewed.
One of the groups is Travellers Int’l Hotel Group, a 50:50 jv between Alliance Global & Genting HK, which has plans to develop a US$1bn integrated resort on a 40-ha site in the Manila Bay City. While the news is a potential setback to Genting HK’s long term expansion plans, it would enable 50% associate Resorts World Manila to enjoy virtual monopoly of the high end casino segment as there is little competition in the interim. Using a more aggressive valuation pegging RWM to RWS’ EV/EBITDA & margins & assuming a daily gaming win of US$2m vs US$6.8m for RWS could potentially bring the stock’s fair value to US$0.50.
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