Silver Heritage Group has called for patience from shareholders as the company looks to bridge a US$13.8 million funding gap for completion of its Tiger Palace Resort in Bhairahawa, Nepal.
In his address at the Group’s annual general meeting in Sydney on Thursday, Managing Director Mike Bolsover described achieving the planned deadlines of opening the resort’s hotel and public facilities by August and casino by November as a “challenge” with Silver Heritage still working on a number of potential funding models.
They include provision entirely through debt from new local and international providers; provision entirely through an equity investment from new local and international providers; funding entirely through an equity investment from existing shareholders through an entitlements offer or otherwise; and an increase of the debt facilities provided by the company’s existing debt provider.
“We are not quite there with a finalized funding solution but are well advanced on several and our objective is to announce the preferred solution to you shortly,” Mr Bolsover said. “The challenge will then be to complete the exercise and deliver the funds in a timely manner to complete construction to the revised schedule.”
Mr Bolsover said that progress had also been hindered by the “complicated and protracted process” involved in obtaining approval to raise the equity ceiling of its local investing company SHIPL, but that solid progress had been made.
Silver Heritage also acknowledged that many of is contracting companies were yet to be paid, with Chairman David Green admitting, “we have been unable to provide any certainty to them as to the duration of the delays.”
“We have been fortunate that most of our contractors have been supportive and have worked with us to minimize the impact this has on our ability to complete construction in accordance with our revised timeline.”
Mr Green said that Silver Heritage had every intention of completing the entire resort by November.
“There have been times when finding a way out would have been far easier than finding a way to address the myriad challenges which have been presented … the Board has no intention of finding a way out,” he said.
There was some positive news for Silver Heritage in 1Q17, with total Adjusted EBITDA up 8% year-on-year to US$654,000 and net cash flow at its Phoenix Club in Vietnam up more than 50% to US$1.3 million.
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