Hong Kong’s Success Universe Ltd says it will extend financial assistance by way of a HK$58.8 million (US$7.6 million) loan to its 49%-owned Pier 16 – Property Development, the operating entity of Macau integrated resort Ponte 16, to facilitate its ongoing operations.
The loan, which follows an earlier HK$39.2 million (US$5.1 million) provision paid out in July, forms part of agreements Success Universe signed in 2007 which outline certain obligations around shareholder loans, up to a maximum of HK$1.19 billion.
A similar amount is to be paid over time by SJM – Investment Limited, a subsidiary of Sociedade de Jogos de Macau, S.A. (SJM), which holds the other 51% stake in Pier 16 – Property Development.
According to a Thursday filing, the latest loan provision takes the outstanding balance of loans owed to Success Universe by Pier 16 – Property Development to HK$219 million (US$28.3 million), although the company can ask Success Universe for up to another HK$490 million (US$63.2 million) under the 2007 agreement.
It was not made clear whether SJM has also provided a loan for its share.
“The massive outbreak of COVID-19 in early 2020 has constituted an unprecedented challenge to the global economy,” Success Universe said.
“The outbreak was successfully under control with the swift actions having been taken by the Macau government. Nevertheless, entry restrictions, curtailment of transportation channels and quarantine requirements led to the fall of tourist arrivals over 80% in the first half of 2020.
“With the suspension of group and individual travel visas from the Mainland China, the pandemic is inevitably hitting Ponte 16’s gaming performance and the Group’s shared loss of the associates relating to Ponte 16 for the first half of 2020 was approximately HK$64 million.
“The Group believes that the travel and tourism industries in Macau will recover at a gradual pace as long as the pandemic is under control, and Ponte 16 will take full initiative to leverage opportunities brought up by the market rebound.
“As Pier 16 – Property Development is a 49% owned associate of the Group, the Directors consider that the provision of [financial assistance], which will facilitate the development and operation of Ponte 16, will be beneficial to the Group.”
Located on Macau’s Inner Harbour, Ponte 16 opened in 2008 at a total development cost of around HK$3.2 billion (US$413 million).