GGRAsia – Summit Ascent says Suntrust owes it US$6mln bond interest

Summit Ascent says Suntrust owes it US$6mln bond interest

Jan 17, 2023 Newsdesk Latest News, Philippines, Top of the deck

Hong Kong-listed Summit Ascent Holdings Ltd says its profit for financial year ending December 31, 2022, could face a “material adverse” outcome due to a linked firm, Philippines-based Suntrust Resort Holdings Inc, failing last year to pay due interest on convertible bonds issued in 2020 to a Summit Ascent unit.

The five-year, 6.0-percent convertible bonds in the principal amount of PHP5.6 billion (US$102.7 million) were issued to Summit Ascent unit, Summit Ascent Investments Ltd, by Suntrust. They are convertible into shares of Suntrust.

Summit Ascent said in a Monday filing that Suntrust had “failed to pay the coupon interest for the second year due on 30 December 2022 after the lapse of a 15-day grace period provided under the terms of the 2020 convertible bonds”.

It added that the coupon interest amounted to PHP336 million, which is about US$6.1 million at current exchange rates.

“If provision is made for a significant amount of the overdue interest, this will have a material adverse effect on the profit of the company for the financial year ended 31 December 2022,” stated Summit Ascent.

Suntrust is developing the “main hotel casino” at the Westside City Project, located in Manila’s Entertainment City. According to information provided by the group, the project has a price tag of approximately US$1 billion, and should commence operation in 2024.

Summit Ascent added in the Monday filing that it was “in discussion with Suntrust on the payment arrangement of the overdue interest but no concrete plan has been reached as at the date of this announcement”.

Summit Ascent is an investor in the Tigre de Cristal casino resort, near the Russian Pacific port of Vladivostok.

The group returned to profit in the first half this year, on revenue that rose 37.4 percent year-on-year. The improvement was “predominantly attributable to a strong domestic market in the Russian Federation,” for the Tigre de Cristal gaming business.

Summit Ascent and Suntrust are non-wholly owned subsidiaries of Hong Kong-listed LET Group Holdings Ltd, formerly known as Suncity Group Holdings Ltd.