Oct 15, 2019 Newsdesk Latest News, Macau, Top of the deck
Hong Kong-listed South Shore Holdings Ltd, the developer and promoter of The 13 Hotel (pictured) in Macau, said on Tuesday that the company has an agreement that could lead to the disposal of a 40-percent interest in the subsidiary that owns the hotel venue, for a total consideration of “up to HKD750 million” (US$95.6 million).
Neither the identity of the company’s subsidiary, nor the prospective investors of the deal were specified in the Tuesday filing. The subsidiary is said to have a liability for bank borrowings of approximately HKD2.94 billion, plus accrued interest.
South Shore’s announcement was filed to the Hong Kong bourse on Tuesday morning, followed by a suspension of trading in the shares of South Shore with effect from 9am on that day.
The filing said South Shore expected to strike another agreement relating to the disposal of a “further 10 percent” in the subsidiary that owns The 13 Hotel.
The property is on the border between Coloane and the casino district of Cotai in Macau. The hotel had a partial opening on August 31, 2018. The firm aspired to have a casino at the property.
South Shore announced in late January it was entering a “non-binding memorandum of understanding” (MOU) with an associate of a substantial shareholder of the company in order to explore a “potential investment” in the group. The proceeds of the investment were to be used to reduce the indebtedness relating to the development of The 13 Hotel.
A series of announcements regarding incremental extensions to the expiry date of the MOU have been filed to the Hong Kong bourse starting in April, up to Friday last week.
South Shore had reported a net loss of more than HKD5.84 billion for its fiscal year ended March 31, 2019, according to the company’s annual report filed in late August. It had a net loss of HKD1.57 billion the previous financial year. The company said the increase in net loss was due to an aggregate impairment of approximately HKD4.70 billion on the carrying amount of assets under the hotel segment.
South Shore had not made any formal agreement with any Macau gaming concessionaires or sub-concessionaires in respect of gaming operations at The 13 Hotel, the company noted in its annual report. That had resulted in a “significant reduction” in hotel occupancy and room rates compared to the anticipated ones; with a similar impact on revenue compared to what had been earlier forecast in the company’s business plans, South Shore said in its annual report.
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