Frontier Capital Group Ltd. of Australia announced Tuesday the acquisition of Stotsenberg Leisure & Hotel Corp. in the Philippines.
The acquired assets consist of the Stotsenberg Hotel and Casablanca Casino, both located at the Clark Freeport Zone.
“Frontier Capital has moved into the lucrative gaming and hospitality industry with the acquisition of Stotsenberg Hotel and the Casablanca Casino. The directors see the acquisition as a bold initiative that they believe will greatly enhance shareholder value,” said Frontier director Ram Navaratnam.
He said the company bought Stotsenberg through a scrip only payment with a $25-million profit guarantee over five years from E!xcite Gaming and Entertainment Inc., the appointed managers of the hotel and casino.
E!xcite provides full and comprehensive advisory, development and business management services to casino and integrated resort owners.
“Looking at our peers on the ASX, we believe Frontier Capital is considerably undervalued with a market cap in the order of only $45 million, while Donaco International’s market cap is around $400 million,” Navaratnam said.
The company is pinning growth expectations on the recently announced $1.5-billion passenger terminal expansion project at Clark International Airport aimed at doubling traffic to 8 million in 2017 and hitting 80 million passengers by 2032.
“The development of the Clark International Airport, which is less than 2 kilometers from the hotel and casino, will help drive our expansion targets. Forecast profit is expected to more than double to $11.7 million over the next two years,” said Navaratnam.
Frontier Capital launched a new Web site coinciding with the re-listing at fcgl.com.au, where recent presentations and broker analysis can be viewed. Othel V. Campos