By Ben Blaschke
Beleaguered Macau hotel The 13 has delayed its opening once again, with the planned 31 March launch date pushed back another month to 30 April 2018 due to delays related to a valuation assessment.
The news formed part of the latest update by The 13 Holdings Ltd, filed with the Hong Kong Stock Exchange late Tuesday, on the proposed issuance of rights issue shares to the value of HK$973 million which it hopes will provide the funds it needs to finally complete The 13 Hotel, located in Cotai.
In a lengthy letter from the board outlining its predicament, The 13 Holdings revealed it would no longer be able to meet its most recent 31 March 2018 launch date.
“As additional time was required by both the company and the valuer for the preparation and the due diligence works in respect of the valuation assessment on The 13 Hotel project, which resulted in delays in the expected timetable for the rights issue, the hotel opening, as at the latest practicable date, is expected to be on or before 30 April 2018,” the company stated.
It added that the revised 30 April opening was in itself “subject to keeping to the rights issue timetable and the confirmation of the key contractors, suppliers and vendors on the hotel works delivery and completion program upon the publication of this circular.”
The 13 Holdings revealed last October its proposed issuance of rights issue shares, which it admitted were a final option to obtain the necessary funding for completion of the ambitious project, dubbed the most luxurious hotel in the world.
Despite being granted a HK$300 million bridging loan in December 2016, work on The 13 was shut down in July 2017 due to a shortage of funds. The drawdown of the bridging loan in October saw work resume on 21 November 2017. However, “due to delays in obtaining various licenses and permits, and more costs requiring to be incurred on the hotel decoration, acquisition of FF&E and OS&E in order to meet the market expectations for a unique ultra-luxury hotel, further funding is required for completion of The 13 Hotel,” the company stated on Tuesday.
The 13 Holdings said it remains in talks with its lending bank in regards to possible options, but news of yet another delay makes any more bank assistance unlikely with the company acknowledging that, “Pursuant to a facility agreement for a bank loan granted by a lending bank to the group, among other things, the group was required to open The 13 Hotel by no later than 31 March 2018.
“As a result, the group remains in need of financing and the rights issue (together with the bridge loan) is expected to provide the funding required to complete the remaining works on The 13 Hotel and avoid triggering a call on the loan.”
The 13 Holdings has previously outlined its intention to use the net proceeds from the rights issue – which would see the total issued share capital of the company increase by 50% – to settle the remaining pre-opening expenses of The 13 Hotel. Those expenses include costs related to decoration, furniture, fixtures and equipment, operating supplies and equipment and other hotel operation preparation costs.
The company also reiterated on Tuesday its intention to include a casino inside the hotel, but added, “The authorization to install and operate a casino in The 13 Hotel is subject to the approval of the Macau Government and therefore its success remains an uncertainty.
“As such, the Gaming Operation may or may not commence at The 13 Hotel, but will not affect the opening and the hotel operation of The 13 Hotel.”
