Bloomberry May Sell Jeju Sun

Bloomberry Resorts Corp. may sell off its resort complex Jeju Sun (l.), on Jeju Island in South Korea, due to underperformance for the market. Bloomberry acquired a majority stake in the property last year.

Jeju Sun closed for a month in 2015

Philippine-listed Bloomberry Resorts, which holds a majority stake in Jeju Sun Hotel and Casino in South Korea, is considering selling the property after owning it for little more than a year.

“The company confirms that selling the property in Jeju Island, South Korea is one of the options it is looking at,” Bloomberry said in a filing to the Philippine Stock Exchange. “However, no agreement has been signed… to date.”

Asia Gaming Brief reports the company, which built and manages Solaire in Manila’s Entertainment City, has been less than impressed by Jeju Sun’s performance. Bloomberry bought a piece of the venue in April 2015, when it was known as THE Hotel and LVegas Casino. The property reported a net loss of PHP189.5 million for the third quarter of 2015, compared to a profit of PHP991.7 million during the same period in 2014.

Jeju Sun closed between May and September for renovations and an expansion of the gaming area. Casino operations were again suspended between November 16 and December 15, part of a penalty imposed by the local regulator because of tax issues relating to the previous management, said Bloomberry in its first quarter 2016 results.

In the first quarter of 2016, Jeju Sun posted gross gaming revenue of PHP23.3 million (US$502,000), according to Bloomberry. It recorded negative earnings before interest, taxation, depreciation and amortization of PHP197.7 million for the period, AGB reported.

“The property is still in the process of ramping up its gaming business after refurbishing and expanding the gaming area in 2015,” Bloomberry wrote in the aftermath of the Q1 results.

Jeju Island is a semiautonomous province that hosts eight foreigners-only casinos. Among new projects announced for the island is the $1.8 billion Resorts World Jeju, a development of Genting Singapore Plc and mainland China real estate developer Landing International Development Ltd.; Genting Singapore recently announced it had increased its stake in Landing Jeju Development Co. with an additional 15 million new ordinary shares, for a total investment of about KRW 150 billion (US$129.5 million). The property should open in late 2017.

And in May, a subsidiary of Asian casino investor Melco International Development Ltd. announced it would serve as consultant to a casino that has yet “to be developed” over a period of three years on Jeju Island. South Korean firm Lotte Tour Development Co. Ltd. and Chinese state-owned developer Greenland Group are collaborating on a Jeju casino resort called the Dream Tower.

Bloomberry controls the resort through its South Korean subsidiary, Solaire Korea Co. Ltd.