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Alvin Chau transfers US$500 million in Suncity Group loans to perpetual securities, commits another US$775 million

The Chairman of Hong Kong-listed Suncity Group Holdings, Alvin Chau, has exchanged existing shareholder loans worth HK$3.88 billion (US$500 million) into perpetual securities – a move Suncity says will “reduce its gearing ratio, enlarge its capital base and enhance its net asset position.”

The perpetual securities, issued on Tuesday, have no maturity date and Suncity has the option on whether or not to repay the interest and principal from the 10th year on, the group said.

Chau has also committed to provide additional funds up to a maximum of HK$6 billion (US$775 million) from his own pocket in the form of additional perpetual securities.

The additional funds will be used to finance Suncity’s integrated resort projects, including Hoiana in Vietnam, Russia’s Tigre de Cristal and a US$700 million hotel and casino development at Westside City Resorts World in Manila.

“Suncity Group is riding on the fast-track of integrated resort development,” said Chau. “I completely understand that a high growth company like Suncity requires a lot of funds to expand. As the largest shareholder, the largest creditor and the Chairman of Suncity Group, I am happy to dip into my own pockets to ensure that Suncity’s expansion will go on.

“I am fully backing Suncity, and I am confident that Suncity will soon turn into one of the most aspiring leaders in integrated resorts in Asia.”

Suncity described the decision to exchange his shareholder loans into perpetual securities as a “strong injection of confidence into the Group as this shows that Mr Chau is not worried about the Group’s ability to repay him.”

Suncity Group Holdings is the listed arm of Suncity, which oversees its integrated resort operations and management as well as various real estate interests in Macau and mainland China.

Junket operations are controlled separately by the group’s non-listed arm, with Chau last month providing an unprecedented insight into its accounts and describing Suncity as “a very stable financial platform” in response to a series of rumors regarding its financials.

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