Hong Kong-listed The 13 Holdings Ltd – developer of The 13 Hotel (pictured) – said on Friday it expects to open the Macau property “on or before” March 31, 2018, after securing new funding to complete the scheme. The promoter of the venue mentioned again its intention of having gaming operations at the property “as soon as practicable”.
On Friday, the company announced a proposed rights issue to raise gross proceeds of approximately HKD1.01 billion (US$129.8 million). The proposed rights issue – subject to obtaining shareholders’ approval – has been fully underwritten by Get Nice Securities Ltd and certain shareholders of The 13 Holdings, the company said. Because of the rights issue, the company is also proposing shareholders to approve a capital reorganisation, namely a 1 for 10 consolidation of shares and a capital reduction.
Get Nice Securities has also agreed a bridge loan term sheet with The 13 Holdings to provide HKD250 million in capital, which is expected to be repaid from proceeds of the proposed rights issue, said the latter firm.
The 13 Holdings additionally said it had a deal for Opus Capital Ltd for the latter to place up to HKD740 million in loan notes.
The firm said the proceeds from the rights issue and the notes – in an aggregate amount of HK$1.75 billion – would be used for: “Settling the remaining pre-opening expenses of The 13 Hotel, including costs related to decoration, furniture, fixtures, and equipment, operating supplies and equipment, and other hotel operation preparation costs; debt servicing; and supporting the general working capital of the company.”
The company further stated it would also be making use of HKD121 million due from completion of the sale of its 51.76-percent interest in Paul Y. Engineering Group Ltd as working capital. The 13 Holdings Ltd said in June it had agreed to sell its construction arm to fund the completion of the hotel property, a project on the border of the Cotai and Coloane districts in Macau.
“The company expects that [these new funds] will allow it to target completion and opening of its hotel on Macau’s Cotai strip by the end of March 2018, subject to confirmation from key contractors, suppliers, and vendors once the company’s financial position allows it to resume works,” said The 13 Holdings.
The firm’s annual results said that as of March 31, The 13 Holdings’ current liabilities exceeded its current assets by HKD300.9 million. Additionally, the company had contracted capital commitments not provided for in the consolidated results, amounting to HKD369 million.
The 13 Holdings said it would request the Macao Government Tourism Office (MGTO) to conduct a site inspection to the property, adding that this was likely to happen in mid-February 2018. The company then expected MGTO to issue “all the relevant operational licences” in March, “for the opening of The 13 Hotel on or before 31 March 2018”.
The 13 Holdings has in the past mentioned plans for a casino at the property, but had made no reference in its more recent releases about the possibility of gaming facilities at the venue.
In Friday’s filing, the company said its intention “is to include gaming operation in The 13 Hotel as soon as practicable, subject to the progress of the licensed [gaming] operator in submitting an application for and obtaining approval for the gaming operation after the licences for the operation of The 13 Hotel have been granted or when it is clear such licences are almost certain to be granted as a matter of procedure”.
The 13 Holdings said that it has already signed a memorandum of understanding with an affiliate of one of the holders of a Macau gaming concession or sub-concession. The company did not identify which Macau gaming concessionaire would be providing casino operations at the venue.
As The 13 Holdings is not one of Macau’s six licensed gaming concessionaires, it would need either to have a deal with one of them for a so-called service agreement, piggybacking on its licence – in order to operate its asset as a “satellite” property – or even to sell majority equity ownership in its asset to one of the six licensees, in order to advance the possibility of bringing gaming to the site.
Lionel Leong Vai Tac, Macau’s Secretary for Economy and Finance, said last week no gaming licence application had been made as of October 19 for The 13 Hotel.
“The company would like to reiterate that although it is the company’s intention to include gaming operation in The 13 Hotel, it is subject to, among other things, the entering into a formal agreement between the company and the licensed operator, and the approval of the Macau government, and as such, gaming operation may or may not commence at The 13 Hotel,” said the firm.
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Wong Sio Chak
Macau’s Secretary for Security