Hong Kong-listed Suncity Group, which holds interests in integrated resort developments in Vietnam, the Philippines and Russia, has foreshadowed a possible change of control after lenders demanded full repayment of loans issued to controlling shareholder Alvin Chau.
Chau, a former Chairman and director of Suncity Group, stepped down last week after he was arrested and detained without bail by Macau authorities for alleged criminal association, illegal gambling and money laundering.
According to a Friday announcement, Chau’s wholly-owned Star Soul Investments Limited has received a letter from Wooco Secretarial Services, acting as agent to a syndicate of lenders, alleging Chau’s arrest constitutes an event of default under a facility agreement and demanding full repayment of loans plus interest, worth a combined HK$313,610,959 (US$40.2 million), within five business days from 8 December 2021.
Failure to pay will see Wooco take legal action with a view to securing repayment by taking ownership of various securities for disposal, including the 4,991,643,335 Suncity shares – representing a controlling 74.85% stake – currently held by Fame Select Ltd. Fame Select is 50% owned by Chau and 50% by Cheng Ting Kong.
Wooco would also look to seize, among a range of other securities, HK$402 million convertible bonds held by Fame Select and convertible into 1,546,153,846 Suncity shares, HK$177 million convertible bonds held by Chau’s wholly-owned Star Hope Ltd and convertible into 196,666,666 Suncity shares, and HK$120 million convertible bonds held by Suncity executive Director Andrew Lo Kai Bong and convertible into 133,333,333 Suncity shares, as well as the entire issued share capital of Fame Select and Star Hope.
Suncity said it had no information as to how Wooco will deal with the securities outlined in the event of enforcement but noted, “Enforcement by Wooco of the above securities may lead to a change in control of the Company.”
It also remains unclear how such action would impact the ongoing development and operations of Suncity’s integrated resort projects. The group is part of a three-way joint venture that opened Hoiana in Vietnam last year, holds a majority interest in Tigre de Cristal in Vladivostok, Russia, and is developing a US$1 billion hotel and casino at Westside City Resorts World in Manila’s Entertainment City precinct.
Chau was one of 11 people arrested by Macau’s Judiciary Police and one of six subsequently transferred to Coloane Prison to await trial in late November. Suncity’s junket entity, which is not directly linked to the listed company, officially announced the cessation of its junket business over the weekend, having last week shut down all of its Macau VIP Clubs.
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