South Shore Holdings, parent company of Macau’s 13 Hotel, said it has applied to its bank for a “standstill” to try to prevent liquidation proceedings after the bank issued a demand for immediate payment of a HK$2.95 billion (US$380 million) loan used to finance construction of the ill-fated luxury resort.
The demand, which covers the entire principal amount plus interest, comes after the company was unable to pay HK$470 million due the bank in March. Those funds were supposed to come from the sale of a 50 percent interest in the hotel which has yet to be completed.
Hong Kong-based South Shore said neither its “borrowing entity,” a wholly owned subsidiary, nor the company itself as guarantor for the loan “can repay at this time,” and that it is “seeking assurances from the bank that it will not take imminent steps either to enforce its security over the 13 Hotel or to liquidate the company.”
It added that it “envisages working closely with the bank to achieve an orderly divestment of the company’s interests in the 13 Hotel.”
South Shore has not disclosed the name of the bank.
The sale of the 50 percent stake for HK$750 million to a Hong Kong consortium was set to close this month but has been extended to June, South Shore said, to ensure fulfilment of certain conditions attached to the sale and purchase agreements.
The company cited the “severe adverse effect of the Covid-19 pandemic on the state of the market, in Macau, and generally” as a reason for the delay.
The 13 opened at the south end of the Cotai resort district in August 2018 following a series of delays attributed to problems securing funding. Touted as the ultimate in luxury for an anticipated high-end clientele, the resort opened with a number of its suites and other attractions unfinished and no word on when it would be able to offer gaming under a reputed service agreement with casino concessionaire Melco Resorts and Entertainment.
South Shore reported a loss of HK$506.7 million for the six months ended September 2019, and last year sold off the 13’s fleet of custom-built Rolls Royces.
