PANAMA, REPUBLIC OF PANAMA -- (Marketwired) -- 08/11/13 -- Thunderbird Resorts Inc. ("Thunderbird" or "Group") (FRANKFURT: 4TR)(EURONEXT: TBIRD) is pleased to announce that it has sold its entire economic interest and management rights in its Philippines and related British Virgin Islands operations to Magnum Leisure Holdings Inc. and its related entities, affiliates of Solar Entertainment Corporation (collectively "Magnum"), for a post-tax, net price of approximately $26.5 million. The Group's reported consolidated debt will also be reduced by at least $9.2 million.
Thunderbird has also executed a 36-month non-compete agreement with Magnum in the Philippines. Of the net price: a) $5 million will be paid via a promissory note that will amortize over approximately 18 months at a 7% interest rate and is backed by a letter of credit issued by a major banking institution; and b) $5 million will be subject to hold backs by Magnum for up to 30 months to cover potential contingent liabilities.
The Group had announced in August 2011 that the Group and Solar Entertainment Corporation ("Solar") would enter into a joint venture to co-own the Philippines operations. The Group's decision to sell rather than to jointly own the Philippine operations was based on further strategic analysis and determined as the best decision to building shareholder value.
While the Philippines represented approximately 45% of the Group's global property EBITDA, the net price plus debt reduction is equal to approximately $1.39 per share or 155% of the Group's 30-day average price of $0.90 per share. Moreover, Thunderbird continues to own approximately the following in Latin America(1):
Operations: Gaming, hotel, food and beverage and real estate businesses in Peru (100% Group owned), Costa Rica (50% to 56.2% Group owned) and Nicaragua (55.9% Group owned); and operated by approximately 1,700 employees.Revenues: $58.4 million annualized based on June 30, 2013 preliminary results, of which 85% is from gaming and 15% from non-gaming businesses.Property EBITDA: $10.8 million annualized based on June 30, 2013 preliminary results.Corporate Expense: $4.8 million annualized based on June 30, 2013 preliminary results.Real Estate: $62 million in market value based on appraisals performed for virtually all properties within the last 24 months. On our balance sheet, we book real estate based on depreciated book value, which was $46.9 million based on June 30, 2013 preliminary results.Debt: $57.2 million from continuing and discontinued operations based on June 30, 2013 preliminary results and net of that Philippines-related debt reduced from Group books as part of the sale to Solar. The Group will likely pay down additional debt in the near future.Gaming Positions: 2,885 slot machines and 616 table positions divided among 19 operations with an annual visitor count exceeding 2.5 million per year.Hotel Rooms: 87 rooms owned between the 66-room Fiesta Hotel in a prime location in Miraflores, Lima, Peru, the 20-room Fiesta Hotel in Perez Zeledon, Costa Rica, and 398 rooms in 3 hotels managed by the Group in Lima, Peru.
With the sale of the Philippines, the Group now has fresh capital to further reduce debt and to invest in building cash flows in Peru, Costa Rica and Nicaragua. We will continue to focus on gaming as our core business.
We thank the many dedicated employees and associates who helped Thunderbird to grow in the Philippines. We wish them and Magnum great success. Finally, our special thanks to Angel Sueiro who has resigned as an officer of Thunderbird Resorts Inc. and its affiliates. By remaining with the Philippines operations under new ownership, he facilitated the transaction. Angel Sueiro dedicated many years of service to Thunderbird and we wish him and his family well.
ABOUT THE COMPANY
We are an international provider of branded casino and hospitality services, focused on markets in Latin America. Our mission is to "create extraordinary experiences for our guests." Additional information about the Group is available at www.thunderbirdresorts.com.
(1) Effective January 1, 2013, IFRS 11 changed the way that joint ventures are accounted for whereby proportional consolidation is no longer allowed and equity accounting should be applied to joint ventures. Until further notice and for the convenience of the reader and for illustrative purposes, the Group has elected to represent the Costa Rican joint venture proportionally when discussing financial performance in this release. Such presentation varies from the way that the Group will account for the Costa Rican joint venture in our Half-year Financial Statements and Annual Audited Financial Statements.
Cautionary Notice: This release contains certain forward-looking statements within the meaning of the securities laws and regulations of various international, federal, and state jurisdictions. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential revenue and future plans and objectives of the Group are forward-looking statements that involve risk and uncertainties. There can be no assurances that such statements will prove to be accurate and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Group's forward-looking statements include competitive pressures, unfavorable changes in regulatory structures, and general risks associated with business, all of which are disclosed under the heading "Risk Factors" and elsewhere in the Group's documents filed from time-to-time with the AFM and other regulatory authorities.
Thunderbird Resorts Inc.
Chief Financial Officer