PH Resorts Group, the developer of stalled Cebu integrated resort Emerald Bay, is looking to convert capital infused by its parent company Udenna Corporation into common stock in order to resolve a negative equity position.
The company informed the Philippine Stock Exchange on Monday that one of the main reasons it finds itself in such a position is that Php4.21 billion (US$74.3 million) in capital infusions provided by Udenna as advances for future stock subscriptions had been booked as liabilities due to insufficient authorized capital stock.
This had resulted in a negative equity position as of 31 March 2025 of Php503.7 million (US$8.9 million).
In order to correct the situation, PH Resorts Group said it continues to work towards an increase of its authorized capital stock from Php8.0 billion (US$141 million) to Php15.0 billion (US$265 million) by the end of this year, noting that such an increase was previously approved by its board of directors and shareholders. It will also be presented for reapproval during the Annual Stockholders’ Meeting scheduled for this Thursday 17 July.
“Once the application is approved, Php3.37 billion (US$59.4 million) of advances for future stock subscription and Php718.0 million (US$12.7 million) of deposits for future stock subscription will be converted to equity and, thus, the proforma equity as of 31 March 2025 would be positive Php2.86 billion (US$50.4 million),” it explained.
A positive equity position does not, however, solve the more pressing issue of the stalled Emerald Bay development and recent reports that the company’s lender, China Banking Corp (Chinabank), is planning to sell the property before work can resume.
China bank stated in early May that it would sell the Cebu land after PH Resorts Group failed to meet a repurchase deadline under a previous refinancing deal. That deal, signed in October 2023 between Chinabank and Lapulapu Leisure Inc (LLI) – the subsidiary of PH Resorts Group that was developing Emerald Bay – involved selling the property to Chinabank but with an option to buy it back by March 2025 should it successfully secure new investors.
That deadline has now long passed with Chinabank telling local media outlets it had been talking to “a couple of interested parties” about acquiring the 12.4-hectare site.
Emerald Bay had been envisioned to become Cebu’s second integrated resort after NUSTAR, with plans for a five-star hotel featuring two 15-story towers with 642 rooms, four pools, 18 food and beverage outlets, retail spaces, conference and exhibition facilities, and a large-scale gaming floor with more than 700 electric gaming machines and over 140 tables.