Suncity listco flags 2-yr extension on convertible bonds

Oct 16, 2020 Newsdesk Latest News, Philippines, Rest of Asia, Top of the deck  

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Casino resort backer Suncity Group Holdings Ltd, controlled by Macau junket investor Alvin Chau Cheok Wa, says it has an agreement with a lender for a two-year extension, to December 7, 2022, on the maturity date of convertible bonds. The bonds are held by Mr Chau and fellow controlling shareholder Cheng Ting Kong.

The outstanding principal amount on the bonds – which are currently due to mature on December 7 – is HKD402 million (US$51.9 million). The extension of the maturity date still needs to be approved by Suncity Group Holdings’ shareholders.

In the absence of an extension, full or partial conversion of the outstanding bonds to conversion shares, would result in fewer than 25 percent of the firm’s issued share capital being held by the public, i.e., below the level required for listing under Hong Kong Stock Exchange rules, the entity said.

The company noted in a Thursday filing that it had recorded net liabilities as of its interim results to June 30.

“In view of the further capital requirements for the business operations, investments and development of the group, the extension will enable the group to postpone a substantial cash outflow and allow the group to have reasonable time to improve its business performance and financial position,” said Suncity Group Holdings.

The Hong Kong-listed firm as a range of capital commitments in regional casino schemes.

It recently became the controlling shareholder of fellow Hong Kong-listed company Summit Ascent Holdings Ltd, the main promoter of the Tigre de Cristal casino resort in the Russian Far East.

Suncity Group Holdings already runs the Hoiana casino resort in Vietnam, and is an investor in the project.

It is also putting money into a new Philippine casino investment that is part of the Westside City Project in Manila. The casino project in the Philippine capital is being developed by Suntrust Home Developers Inc, a company controlled by Suncity Group Holdings.

In the event of full conversion of the outstanding convertible bonds held by Fame Select Ltd – a private offshore entity held 50:50 by Mr Chau and Mr Cheng – just under 1.55 billion conversion shares will be issuable to Fame Select. Fame Select currently controls 74.87 percent of Suncity Group Holdings.

The initial conversion price is HKD0.26 per conversion share, subject to adjustments.

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