Discovery World pushes P1-B IPO

MANILA, Philippines - The company behind upscale resort hotel Discovery Shores Boracay has secured regulatory approval to raise P1 billion through an initial public offering (IPO).

Discovery World Corp. is seeking to become only the fourth firm to go public this year as a number of other applicants recently shelved their IPO plans amid the volatility in the stock market.

Discovery World is majority owned by JKTC Equities Inc. (66.07 percent) while The Discovery Leisure Co. Inc. owns the remaining 33.93 percent.

JKTC is the investment holding firm of the Tiu family, which has  investments in Hong Kong, Singapore, Taiwan, China, Australia, New Zealand and Canada. The Discovery Leisure, for its part, manages the Discovery hotel and resort properties in the Philippines.

Three firms have so far debuted in the local bourse: Philippine Business Bank, Asia United Bank and Del Monte Pacific Ltd.

However, volatile swings in the local bourse prompted tugboat operator Harbor Star Shipping Services Inc., Gokongwei-led Robinsons Retail Holdings Inc. and Travellers Hotel Group Inc. to defer their IPO.

The resort operator plans to sell 306 million common shares at a maximum price of P3.28 each to generate P1.003 billion in fresh capital.

The offer period will run from July 23 to 29, which will be followed by listing in the Philippine Stock Exchange on Aug. 1. Abacus Capital & Investment Corp. is the issue manager and underwriter.

“The net proceeds from the offer will be used for investments in new businesses, expansion of current business, debt retirement and working capital purposes,” Discovery World said.

Specifically, P575 million will be spent to develop a resort hotel in Palawan, refurbish boats for its cruise business and buy more shares in culinary, hotel and restaurant, and business administration institution Enderun Colleges.

The resort owner will also retire its P325-million debt while allotting P55 million for general working capital.

The shares to be sold represent 40.05 percent of the issued and outstanding common shares of Discovery World.

The company operates the upscale Discovery Shores Boracay that started commercial operations in 2007. The resort been awarded the No. 1 Hotel Spa in Asia, Top Family Hotel in Asia, No. 2 Top Resorts in Asia and No. 5 Top Resorts in the World in 2012.

Discovery World also operates the brands Discovery Boracay, Discovery Shores, Platitos Resto-Bar, Sands Lounge, Indogo Resto-bar and Sunken Pool Bar.

In the first quarter this year, profits of Discovery World more than doubled to P14.15 million from P6.65 million a year ago.

Revenues inched up to P111.54 million from P107.62 million as weaker food and beverage sales offset the improved performance of room services.