Troubled cruise ship operator Genting Hong Kong has announced the sale of half of its stake in Genting Macau, the company’s wholly-owned local subsidiary that is developing a hotel alongside Macau’s Nam Van Lake.
According to a Wednesday filing with the Hong Kong Stock Exchange, the buyer is prominent local real estate investor Ao Mio Leong, who is the founder and representative of development firm Yoho Group.
Ms Ao will pay a total of HK$750 million (US$96 million) as part of the deal, comprising HK$50 million (US$6.4 million) to acquire the shares and another HK$700 million (US$89.7 million) to cover loan payments previously issued by Genting HK to Genting Macau.
Genting HK said the transaction is estimated to result in a loss of US$159 million on its asset, including loss on loan and impairment of receivables, but will generate much-needed short-term funds of around US$95,958,000 after costs.
The sale comes almost three months after the company suspended all payments to its financial creditors in order to preserve liquidity amid growing COVID-19 pressures, with outstanding debts of US$3.37 billion at 31 July 2020.
Genting HK said Wednesday that the transaction “is aligned with the Group’s objective to sell non-core assets and will reduce the Group’s financial burden in meeting future funding requirements in relation to Genting Macau’s business.
“Further, the Transaction will increase the liquidity of the Group, with the proceeds being used for general working capital for the Group, thereby enabling layup of the cruise ships in its fleet which are not in operation as well as the ongoing operation of those cruise ships that continue to sail, in addition to funding the Group’s cruise-related and other operations.”
Genting Macau, via a 75%-owned subsidiary called Treasure Island Entertainment Co Ltd, is developing a hotel dubbed Resorts World @ Macau on a plot of land measuring 8,100 square meters located alongside Nam Van Lake on the Macau peninsula.
The company has previously detailed plans to add a casino to the development pending approval by Macau authorities, suggesting it expects to take part in an upcoming re-tendering process for gaming licenses when those of the six current concessionaires expire in June 2022.
Another Genting HK subsidiary, Star Cruises, originally purchased the 75% stake in Treasure Island Entertainment Co Ltd in 2007 for HK$1.46 billion (US$188.3 million).