Japan’s Universal Entertainment Corp, the parent company of Okada Manila operator Tiger Resort Leisure and Entertainment (TRLEI), says it will enact an exchange offer to replace US$600 million of existing notes with new notes after failing to gain 100% consent to amend the existing note terms.
The company had announced in September that it would seek approval from holders of the notes to amend their due date from 11 December 2021 to 11 December 2024 while maintaining an interest rate of 8.5% per annum.
That plan, which required the approval of 100% of existing notes holders, fell through last week after Universal received valid tenders and consents representing only 80.3% or US$482 million worth of the notes.
Instead, Universal will implement an exchange offer – which required only 75% approval – for US$482 million of new notes due 11 December 2024. The remaining US$118 million in notes will be redeemed upon maturity on 11 December 2021.
While the exchange offer will serve to delay substantial repayments rather than raising any additional proceeds, Universal revealed last week that it was upsizing a previously announced offering of additional notes from US$100 million to US$135 million.
Universal recently reported a profit of JPY12.67 billion (US$120.1 million) for the first six months of 2020 thanks to strong sales of new pachislot titles in Japan. However, the results weren’t so positive for Okada Manila where net sales declined 48.8% to JPY16.10 billion (US$152.6 million) with an operating loss of JPY5.27 billion (US$49.9 million).
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