US$600mln impairment flagged by The 13 Macau backer

Jul 10, 2019 Newsdesk Latest News, Macau, Top of the deck  

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South Shore Holdings Ltd, the developer of The 13 Hotel, a Macau facility that aspires to have a casino, has warned shareholders it expects to have made a bigger loss in its financial year ended March 31 than the year before.

South Shore told the Hong Kong Stock Exchange on Tuesday: “The company expects to make an impairment of approximately HKD4.7 billion [about US$601.69 million] on the carrying amount of assets under the hotel segment in its financial statements for the year.”

The company said the impairment was a non-cash accounting treatment and had no effect on cash flows.

But it added the move would “significantly increase the loss of the group for the year”.

The company said its auditor might still make adjustments to the numbers for the financial year just ended, but that it would disclose the results as soon as possible.

Trading in South Shore shares has been suspended since July 2. Trading will remain suspended until further notice, the company reiterated in its Tuesday filing to the bourse.

South Shore promotes The 13 Hotel in Macau, which opened in August 2018.

The company has said it intends to put a casino in the hotel, but the Macau government has previously said it has not received a request for permission to do that. Such use would require access to the gaming licence of one of Macau’s current six operators.

South Shore reported last November that it made a net loss of nearly HKD442.4 million in its financial first half ended September 30, having made a first-half net loss of HKD23 million a year earlier.

The company blamed its most recent first-half net loss mainly on an increase in financing costs, depreciation and amortisation charges, and hotel operating expenses.

In June South Shore announced that, with a view to reducing its debt, it had sold for HKD24 million 24 Rolls-Royce cars which had been bought to carry well-heeled customers of The 13 Hotel.

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