Macau Legend Development says it has obtained promises from key shareholders not to immediately request the repayment of a combined HK$480 million (US$61 million) in shareholder loans when they fall due in the coming months, part of the company’s efforts to pay down other debts.
The casino operator, which runs casino operations at its peninsula property Legend Palace under the gaming concession of SJM Resorts S.A., reported Thursday a net loss of HK$4.9 million (US$626,170) in FY23, narrowed from a loss of HK$607.2 million (US$78 million) a year earlier.
However, the group’s total bank and other borrowings amounted to HK$2.57 billion (US$328 million) as at 31 December 2023, of which HK$633.6 million (US$81 million) falls due within the next 12 months. Cash and cash equivalents amount to just HK$63.2 million (US$8.1 million), the company explained, casting doubt on its ability to continue as a going concern.
Despite this, Macau Legend said it has received confirmation in writing from the controlling shareholder in relation to a HK$50 million (US$6.4 million) loan and a substantial shareholder in relation to a HK$100 million (US$12.8 million) loan not to request repayment until 31 August 2024 and 31 March 2024, respectively, and from a substantial shareholder not to request payment on a HK$330 million (US$42 million) loan until 31 March 2025.
The company has also vowed to push for completion of a previously announced sale of its Laos casino Savan Legend, for US$39 million (HK$304.2 million), which would “strengthen the cash flow of the Group, allowing the Group to enhance its liquidity, and that the Group can reallocate more financial resources to its business operation in Macau and for overall future development.”
Macau Legend added that it has “undertaken and will continue to undertake various mitigating measures to manage the current business environment, including a cost control program to minimize the cash outflow of non-essential items.
“With the full border normalization since mid of 2023, and riding on the Macao government target for international visitors to pre-COVID level in 2024, the Group expects that this could lead to improved business and financial performance for the Group.”
Macau Legend reported a 26.7% increase in revenue to HK$901.6 million (US$115 million) in 2023, while Adjusted EBITDA of HK$185.9 million (US$24 million) reversed a HK$218.8 million (US$28 million) loss in 2022.
Gaming revenues for the year decreased by 5% year-on-year due to the company ceasing previous casino management deals at Landmark Casino and Babylon Casino, but the recovery of the market saw Macau Legend claw back HK$331.3 million (US$42 million) in gaming revenues from the improved business environment at Legend Palace and Savan Legend.
The company operates 33 mass market tables at Macau’s Legend Palace, while Savan Legend in Laos runs 22 mass market and 20 VIP tables.
