Macau junket and IR investor Suncity Group Holdings has announced a two-year extension to the maturity date of outstanding convertible bonds worth HK$570 million, held by its majority shareholder Fame Select, in order to “improve its business performance and financial position.”
Fame select is 50% owned by Suncity Group Chairman and CEO Alvin Chau.
In a filing to the Hong Kong Stock Exchange, the company said it had entered into an amendment agreement with Fame Select that will see the maturity date of the convertible bonds extended from 7 December 2018 to 7 December 2020.
Suncity also listed a number of reasons for the agreement, including net liabilities as of 31 December 2017.
“As it is expected that there may be further capital requirements for the business operations of the company in the near future, the board is of the view that the company will not have enough cash to redeem the convertible bonds in the next few months or within the forthcoming financial year,” the company said.
“As such, the alteration 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. The alteration will also allow the company to have more financial flexibility.
“The company considers that it is in the interests of the company and its independent shareholders as a whole to utilize its resources for business development and other business opportunities in order to maximize returns to its shareholders.”
Suncity also referenced Hong Kong Stock Exchange listing rules as a reason for the agreement, with redemption of the convertible bonds to push Fame Select’s holdings from 72.17% to 79.60%. Listing rules require at least 25% of the company’s issued share capital to be held by the public at all times.
Suncity Group is currently building its first integrated resort, Hoiana, in Vietnam – a project in which it holds a 34% stake.
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