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International Entertainment Corporation (IEC) is seeking a significant funding transaction that may result in a change in its ownership structure and help its casino and hotel business in Manila. The Hong Kong-listed firm is reportedly preparing to raise up to HK$1.6 billion (around $205 million) in convertible notes to finance its Philippine partner, DigiPlus Interactive Corporation. If fully availed of by DigiPlus, it is possible that it could gain control of IEC.
On Monday, in a circular to investors, IEC revealed it had secured a subscription deal worth HK$800 million ($103 million) in total in two parts with DigiPlus. The notes carry an initial conversion price of HK$1 (about $0.13) per share. In case DigiPlus decides to convert the full amount, IEC would issue up to 1.6 billion new shares, equivalent to 53.9 percent of its expanded share capital.
Shareholder Vote and Whitewash Waiver
To move the deal forward, IEC will hold an extraordinary general meeting (EGM) on February 26. At that meeting, shareholders will be asked to approve several key items: a specific mandate to issue the conversion shares tied to the notes and a so‑called whitewash waiver under Hong Kong’s Takeovers Code.
Under normal rules, DigiPlus would be required to make a mandatory general offer to all remaining IEC shareholders if its stake crosses the takeover threshold when the notes are converted. The requested whitewash waiver is meant to exempt DigiPlus from that obligation, allowing it to acquire a controlling stake through the conversion without launching a full takeover bid. IEC’s board is therefore asking investors not only to approve the funding itself but also to support this exemption as part of the package.
How IEC Plans to Use the Funds
IEC has outlined a clear plan for how it intends to deploy the money raised from the notes. Around HK$489 million (approximately $63 million) will go toward repaying existing promissory notes that currently carry an annual interest rate of 6 percent. The rest of the proceeds are earmarked to support the company’s casino and hotel operations in the Philippines over the next 2 years, with a focus on strengthening liquidity and easing pressure from higher-cost debt.
The new notes themselves will have an annual interest rate of 3 percent and a maturity of 5 years from the date of issuance. If DigiPlus does not convert the notes before they mature, IEC will redeem them at 108 percent of the principal amount. In its circular, IEC added that the initial conversion price reflects a discount of about 16.7 percent to the company’s closing share price on the day the agreement was signed in November, but still sits well above its net asset value per share.
Financial Performance and Manila Operations
The funding proposal comes after a year of mixed results for IEC. In its financial statement, IEC reported that it earned a sum of HK$566 million ($73 million) in the financial year ending in June 2025. The figure managed more than double in comparison to the preceding financial year. However, despite the impressive figure, IEC reported a net loss of HK$282 million ($36 million).
IEC operates the Newcoast Hotel & Casino complex in Manila, a property that is central to its strategy in the Philippines. In explaining the rationale for the notes issue, the company said the proposed financing would help improve its liquidity profile, lower its reliance on more expensive borrowing, and reinforce its long-term financial position. By pairing a new strategic investor with a structured debt-to-equity instrument, IEC is betting that it can reduce interest costs while giving itself more breathing room to operate and invest in its Manila business.
What’s at Stake for IEC and DigiPlus
If shareholders approve the deal and the whitewash waiver, DigiPlus will gain a path to majority control of IEC through the notes conversion, deepening the partnership between the Hong Kong operator and the Philippine digital gaming group. For IEC, the trade-off lies in accepting significant dilution in exchange for fresh capital and a stronger balance sheet.
With the EGM set for February 26, the next few weeks will determine whether investors are willing to back that strategy. IEC has framed the subscription as a step toward greater financial stability and growth for its Newcoast Hotel & Casino operations. The outcome of the vote will show whether shareholders agree that this HK$1.6 billion convertible notes deal is the right way to get there.
Source: Asia Gaming Brief (AGB)
