PRCI to sell 69% stake in JTH Davies for P154 million

MANILA, Philippines - Listed horse track operator Philippine Racing Club Inc. (PRCI) has sealed a deal with investment firm Capital Managers and Advisors Inc. (CMA) to sell its 68.57-percent stake in JTH Davies Holdings Inc. for P153.76 million.

Under the share purchase agreement entered into Monday, CMA acquired 210.636 million common shares held by PRCI in JTH Davies for P0.73 each share.

PRCI intends to use proceeds from the sale to pay down a significant portion of the company’s outstanding loans to save on interest charges.

The planned divestment is pursuant to to PRCI’s decision to forego the property for share swap agreement it entered into with JTH Davies after the Bureau of Internal Revenues ruled that the transaction is subject to value-added tax.

The proposed deal would have involved the issuance by JTH Davies of 795.818 million shares to PRCI in exchange for the latter’s 21-hectare race track in Sta. Ana, Makati.

The share swap had also met stiff opposition from PRCI minority shareholders on the ground that it is disadvantageous to the company.

In spite of the termination of the share-swap agreement, PRCI is pushing through with the relocation of its horse race track to a new site within the sprawling 70-hectare Saddle & Clubs Leisure Park in Trece Martires, Cavite.

The new racetrack in Cavite — which is more than three times the size of the Sta. Ana racetrack — will include two racetracks, a stable facility with an initial 78 building cluster that can house over 1,000 horses and a four-story grandstand.

PRCI intends to convert the present site in Sta. Ana, Makati City into an upscale commercial and residential project similar to the Lopez family’s Rockwell or Megaworld Corp.’s EastwoodCity.

The Sta. Ana racetrack sits on a 21.6-hectare property owned entirely by PRCI.

PRCI is expanding its off-track betting stations within Metro Manila and selected adjacent population centers in the provinces. The farthest OTB in the north is in Laoag, Ilocos Norte and in the south is in BacolodCity, Negros Occidental.