South Shore Holdings, the company behind ailing Macau luxury resort THE 13, has survived a shareholder vote to dissolve the company.
South Shore called the December 4 vote at the request of Global Allocation Fund, which holds 10 percent of the company’s Hong Kong-listed stock.
GAF said its concerns included the “net liabilities position of the group, the suspension of operations of (THE 13) and the poor performance of the hotel generally,” adding, “The requisitionist expresses its belief that the remaining value in the company will best be maximized with an independent unwind process supervised by a court.”
South Shore contended that winding up the company would see its value “irreversibly destroyed, with likely no recovery for shareholders,” and, as it turned out, GAC’s vote was the only one in favor of dissolution. Investors representing 72 percent of the stock voted against.
South Shore reported a loss of HK$429 million for the six months ended September 30 (US$55 million), driven principally by a loss of HK$513 million at THE 13, partially offset by an operating profit of $161 million from the company’s Hong Kong-based construction business, Paul Y. Engineering.
THE 13 was conceived back in 2013 as the category-killer of Macau’s VIP sector, but the ultra-luxury, all-villa resort failed to secure backing for a casino, and South Shore was able to muster financing for only a partial opening in September 2018.
The resort was closed when the Covid crisis struck, which only worsened its difficulties, and earlier this year, South Shore had to apply to the property’s principal banker for a “standstill” to prevent a forced liquidation after a lender demanded immediate repayment of HK$2.48 billion owed it under a facility agreement.
The resort, which currently is carrying outstanding liabilities of more than HK$6 billion, has been for sale for months, but as yet has failed to locate a buyer.
