South Shore Holdings Ltd, owner of THE 13 Hotel in Macau, says it has received a statutory demand from a lender for the payment of HK$3.28 billion (US$423 million) in outstanding loans and interest or face a winding up petition against the company.
It is unclear if the statutory demand relates to a company called Wise Park Business Limited which in 2018 was assigned the rights to a loan granted to South Shore two years earlier to help fund the development and pre-opening costs of THE 13 Hotel.
South Shore received notice last month that Wise Park was terminating the ongoing renewal of a bridging loan and demanding full payment of the HK$593 million (US$76.5 million) in loans and interest owing. Wise Park also advised that it was exercising its rights under the original loan agreement to assume ownership of The 13 (BVI) Limited, a subsidiary of The 13 Hotel (BVI) Limited linked to South Shore’s engineering arm Paul Y. Engineering Group Limited, and that it had reached agreement with a third party to sell the engineering company for HK$150 million (US$19.3 million).
In an overnight announcement, South Shore revealed that it is now being asked by a legal advisor acting on behalf of a creditor to repay the amount of HK$3.28 billion (US$423 million), comprising HK$2.84 billion (US$366 million) for the outstanding principal of the original loan agreement, HK$79.1 million (US$10 million) in accrued interest, HK$324.2 million (US$42 million) default interest, HK$5.7 million (US$735,000) handling fee and HK$28.4 million (US$3.7 million) in management fees.
“If the Company fails to repay the debt within three weeks from the date of service of the Statutory Demand, the creditor may present a winding up petition against the Company,” South Shore said.
“The Company is considering taking legal advice in this regard. As the Board has only recently received the Statutory Demand, it will take some time for the Board to assess the situation.”
South Shore has established a special committee comprising two Executive Directors and three Independent Non-executive Directors to deal with all matters relating to the hotel business and outstanding loans of the Group, it said.
The company recently issued a profit warning ahead of expected losses for the year ended 31 March 2021 totalling HK$950 million (US$122 million).
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