South Shore Holdings Ltd has confirmed it is involved in ongoing negotiations that could see it dispose of a 60% interest in the wholly-owned subsidiary that beneficially owns luxury Macau hotel THE 13.
Providing an update on the potential disposal in a Hong Kong Stock Exchange filing on Monday, South Shore revealed that, subject to a contract being signed, the deal could see it offload a 60% interest in THE 13 as well as respective bank borrowings of approximately HK$2.94 billion and accrued interest amounting to HK$1.20 billion.
The company has already received a HK$70 million deposit, with the party in question – described as “an associate of a substantial shareholder” – having previously signed a Memorandum of Understanding (MoU) to invest up to HK$1.5 billion in acquiring a stake.
South Shore’s update came on the same day as it released its final results for the full year ended 31 March 2019, which saw revenue increase 38% to HK$9.38 billion but more importantly a widened loss of HK$5.85 billion – around 272% more than in 2018.
The majority of that loss, HK$5.80 billion, came from THE 13, which opened for business last August. It includes an impairment loss on hotel assets of HK$4.70 billion, depreciation and amortisation charges of HK$465 million for the year and finance costs on bank and other borrowings of HK$272 million.
The hotel’s loss before interest, tax, depreciation, amortisation and impairment was HK$236 million, the company said.
South Shore, which has not yet applied for gaming to be included at THE 13, recently sold 24 of its fleet of 30 red Rolls-Royce Phantoms in order to pay down bank loans.