Japan’s Universal Entertainment Corp, the parent company of Okada Manila operator Tiger Resort Leisure and Entertainment (TRLEI), has announced plans for a consent solicitation that will allow it to replace existing notes to the value of US$600 million and due in 2021 with new notes due 2024, while also raising an additional US$100 million in capital.
Under the consent solicitation, which requires the approval of 100% of existing notes holders, the terms of the existing US$600 million notes would be amended to mature on 11 December 2024, while maintaining an interest rate of 8.5% per annum. TRLEI and Tiger Resort Asia Limited (TRAL) are named as guarantors.
If Universal can’t acquire approval from 100% of notes holders, it will look to implement an exchange offer under which it would replace outstanding existing notes for new notes while amending its original Note Purchase Agreement to eliminate certain covenants and restrictive provisions relating to the existing notes. The company said it would need 75% of holders to confirm their approval to proceed with the exchange offer.
The consent solicitation and the exchange offer will serve to delay substantial repayments for Universal but won’t raise any additional proceeds.
However, Universal said it will also launch an offer of US$100 million in additional notes which will constitute part of the same series as either the amended existing notes offer of the exchange offer, due 11 December 2024.
“The company intends to use the cash proceeds from such sale of additional notes for general corporate purposes,” it said.
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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