South Shore Holdings Ltd has revealed it will offload a 50% stake in embattled Macau hotel THE 13 for HK$750 million after reaching an agreement with three buyers.
The news comes three weeks after South Shore said it was selling a 40% stake to “an associate of a substantial shareholder” with the option to acquire another 10%.
That associate has now been revealed as Fine Intellect Ltd – a wholly-owned subsidiary of ITC Properties Group, which holds a 10.48% stake in South Shore. Under the terms of a Sale and Purchase Agreement signed on 14 October 2019, Fine Intellect Ltd and another company, All Fame Developments Ltd, will each acquire a 20% stake in Uni-Dragon Ltd, the South Shore subsidiary that controls THE 13, for HK$300 million each.
A second Sale and Purchase Agreement signed on 15 October 2019 will see a firm called Ease Link Investments Ltd acquire the remaining 10% for HK$150 million.
South Shore subsidiary Falloncroft Investments Ltd will retain a 50% interest in Uni-Dragon, however Fine Intellect has an option to purchase another 30% stake at any time in the next two years. South Shore said that, as part of the deal, Uni-Dragon will no longer be considered a subsidiary of the company and its financial results will no longer be consolidated into the financial statements of the group.
Located south of the Cotai Strip, THE 13 Hotel opened on 31 August 2018 following a series of delays due to funding problems, but the company recently revealed an average occupancy rate of just 8% through 30 June 2019. A number of rooms also remain unfinished.
Originally envisioned as an uber-luxury casino-hotel, THE 13 has space for 66 gaming tables but has yet to apply for their use under a potential “service agreement” arrangement it previously reached with Macau concessionaire Melco Resorts and Entertainment. Macau’s service agreements allow third party hospitality operators to have gaming in their properties under the license of one of the city’s six gaming licensees.