The Chairman and CEO of Hann Philippines Inc, Dae Sik Han, has revealed he opted to proceed with an initial public offering on the Philippine Stock Exchange to ensure his ambitious expansion plans could proceed without delay.
Hann, the parent company of Hann Casino Resort in Clark, recently confirmed that it would through an entity called Hann Holdings Inc pursue the Php11.8 billion (US$207 million) IPO to fund the company’s ongoing development initiatives, which includes the addition of more gaming space at its existing property and the construction of Hann Reserve Phase 1 development – an uber-luxury golf and gaming resort – in nearby New Clark City.
In an interview with local news channel One News, Han said he chose the IPO over retaining full ownership to ensure there could be no delays due to potential cash flow concerns.
“I’ve been thinking about this listing for a couple of years [knowing] there should be compelling reasons why I have to go for an IPO right now,” he explained.
“The most important thing is I have a lot of plans in place for future expansion. If I don’t go for an IPO right now I can have 100% ownership of my company, but then in two or three years from now, what will be the value of the company?
“What I need to do is look into the pacing of this development instead of being very aggressive. I’m very confident in my master plan and that’s why instead of trying to keep everything myself and maybe having to slow down all of this development, it’s much better to go to the public market and then be aggressive because I know that this will improve the value of the company in a couple of years. I’m very confident and that’s the reason why.”
The new Hann Reserve project will, being built on 450 hectares of land, will when complete feature three 18-hole championship golf courses, the Philippines’ only PGA-affiliated player development facilities, plus international luxury hotel brands, a commercial center, casino, exclusive residences and an international school. The first of those three golf courses is due to open by the end of this year.
Han, who says he has spent around Php50 billion in Clark so far, explained that the focus on golf is vital to differentiate his offering from the many other integrated resort projects across the region.
“Right now the market is very, very competitive. Whether it’s the gaming industry or retail industry, everywhere you go is competitive so one of the most important things is you have to make yourself different.
“I’ve been studying this for years and I decided to use golf as a differentiator.
“Of course, if my business model was just to build a golf course and then make money out of it then I’m not so sure I could do this thing, so my business model is to make money out of gaming.
“Gaming revenue is right now something like 85% of my revenue. Making US$100 million or US$150 million [annually] is really nice but what if I build a really, really nice golf course with that amount of money?
“This is going to be the differentiator because at the other IRs they simply don’t have the property to build golf courses and bring this kind of nature experience for the golfers, so this is one of the main differentiators.
“That’s why I have to spend money – not because my business model is to make money from golf courses but because that is a supporting facility for the gaming.”
Asked about ongoing moves to either tighten restrictions around online gambling or ban the industry altogether, Han – who recently launched his own remote gaming platform out of Hann Casino Resort – said he fully expects stricter regulations to be implemented, However, he insisted this would not impact his efforts to implement an “omni-channel” model across his land-based and online gaming offerings.
“I think online gaming still has a lot of growth ahead and maybe [imposing restrictions], the pacing might slow down, but as a government, as a regulator, it is very reasonable for them to come up with something stricter,” Hann explained.
“It is very foreseeable to for me to see this regulator (PAGCOR) will come up with something stricter, but to me, whatever I’m doing right now is not only about online, it’s about online-offline together, so it won’t affect any my plans.”
Hann said he was implementing an “omni-channel” rewards program combining both land-based and online that would provide golfing experiences for the luxury market and a “Korean experience” – be it K-Pop, K-Food or K-Fashion – for the mass market.
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