Suntrust foreign ownership to increase from bond conversion

MANILA, Philippines — Foreign ownership in Suntrust Resort Holdings Inc. will increase to 65.95 percent from 51.34 percent if the convertible bonds issued to Hong Kong-listed Summit Ascent Holdings are converted into shares.

In 2020, Suntrust issued P5.6 billion in convertible bonds to Summit Ascent. The bonds have a maturity of five years from the issue date of the bonds. However, Suntrust was not able to pay the interest on the bonds.

Suntrust is currently in talks with Summit Ascent for the unpaid dues.

The bonds may be converted into shares, but the conversion period may be extended to the 10th year from the issue date of the convertible bonds.

Assuming the shares are converted, the public float will change to approximately 10.03 percent from 14.33 percent previously.

“However, the conversion rights may be exercised only if it will not cause Suntrust to be in breach of the relevant minimum public float requirement under the relevant Philippine Stock Exchange (PSE) rules, which is currently at 10 percent,” Suntrust said in its disclosure yesterday.

Furthermore, it said that the price at which conversion shares will be issued upon conversion will initially be P1.80 per conversion share, which is subject to adjustment provisions.

In a filing with the Hong Kong Stock Exchange last week, Summit Ascent said Suntrust was unable to pay the interest on the 2020 P5.6 billion bonds ($103 million).

The bonds were issued in exchange for a loan from Summit Ascent to jumpstart development work in the Westside City project.

Suntrust is 51 percent owned by the LET Group and is the developer of integrated casino resort Westside City, which is a subsidiary of Travellers.

Travellers is a venture between Tan’s listed conglomerate Alliance Global Group Inc and the Genting Group of Hong Kong, a casino and cruise ship operator.

The Westside City project is targeted to open in 2024.

The project site consists of portions of three parcels of land located at Manila Bayshore Integrated City in Parañaque City.

In 2020, a co-development agreement between Suntrust and Westside City Resorts World Inc. and Travellers International was signed.

Under the agreement, Westside City and Travellers will lease the project site to Suntrust for development of the main hotel casino.