Gatchalian's Waterfront wins lease contract for Mimosa

MANILA, Philippines - Listed Waterfront Philippines Inc. on Wednesday announced that it has been awarded a multi-billion peso contract for the lease, development, operation and management of the former Mimosa Leisure Estate. In a statement to the Philippine Stock Exchange, Waterfront, which is engaged in the hotel and leisure business, said it will be issued a notice of award by the Clark Development Corp. to manage Mimosa. Levy Laus, outgoing CDC president and chief executive officer, said Waterfront would be paying P1.5 billion to CDC for the contract. He added that the CDC will also earn a minimum annual guaranteed lease starting at P160 million over a 50-year term of the award, which is renewable for another 25 years. Waterfront will also undertake a P1-billion investment in the estate within a period of five years. Following the acceptance of the Notice of Award, CDC and Waterfront will enter into a 90-day Memorandum of Understanding which will mature into a lease agreement upon the delivery of the initial commitments by the Gatchalian-owned company. The agreement states that Waterfront will initially pay CDC an upfront amount of P770 million within 90 days from signing of the MOU. The amount includes P450 million as the required minimum going-concern value payment; P160 million as security deposit and another P160 million as advance lease rental. Waterfront was among the 10 bidders that submitted letters of intent for the project. However, only eight firms attended the pre-bid conference on May 6, 2008. During the bid submission and opening last June 6, only Korean company Hanwool I&D Corporation and Waterfront submitted their respective bids. Waterfront's hotels include Waterfront Cebu; Waterfront Mactan; Waterfront Insular Hotel in Davao City and also has a controlling interest over the Manila Pavilion Hotel. On Wednesday, the company's shares surged 2 percent to P0.51 a piece. GMANews.tv