SM Group, Macau’s Melco ink $1-B deal

MANILA, Philippines - The SM Group has finalized its partnership with the local unit of Macau casino giant Melco Crown Entertainment Ltd. for a $1-billion gaming complex on reclaimed land along Manila Bay.

The development jumpstarts the entry of retail tycoon Henry Sy’s SM Group into the gaming business while welcoming a new global casino player to the Philippines.

In a disclosure, SM’s property and gaming arm Belle Corp. said its subsidiary PremiumLeisure and Amusement Inc. closed the agreement with three units of Melco Crown.

The companies said they implemented “an operating agreement for the operation of an integrated casino, hotel, retail and entertainment complex in Belle’s property.”

“We are confident that Melco Crown will bring its expertise in developing and operating a highly-successful integrated resorts complex and strongly contribute to promoting the Philippines as one of Asia’s premiere tourism destinations,” said Belle vice-chairman Willy Ocier.

No less than Melco Crown’s top executives, Australian billionaire James Packer and Macau gambling tycoon Lawrence Ho, will be in the Philippines for the formal signing of the project tomorrow.

PremiumLeisure signed the agreement with MCE Leisure Philippines Corp., MCE Holdings Philippines Corp. and MCE Holdings No. 2 Philippines Corp.

Belle and MCE are expected to make equal investment contributions to the $1-billion project located within the Philippine Amusement and Gaming Corp.’s 120-hectare Entertainment City that is being groomed to compete with Las Vegas, Singapore and Macau as on international gaming hub.

The Sy family’s SM Group is involved in five core businesses - retail merchandising, mall operations, property, banking, and hotel and leisure.

The project would be Melco’s first outside Macau where it operates the City of Dreams and Altira Macau casinos. The company is developing its third casino, Studio City, which is slated for opening in 2015.

Melco Crown earlier said it wanted to take advantage of the expected growth in the leisure and tourism industries catering to the affluent and growing Asian middle class.

Gambling revenues in the Philippines are forecast to grow from $1.3 billion in 2011 to at least $10 billion by 2017, coming from the operations of the four gaming complexes in Entertainment City.