More than 10 months after first announcing the sale of a minimum 50% stake in embattled Macau hotel THE 13, Hong Kong’s South Shore Holdings has revealed that the transaction has fallen through.
In a Tuesday filing, South Shore, which controls THE 13 via its wholly-owned subsidiary Uni-Dragon, said it had failed to reach agreement with the purchasers to further extend the date upon which all conditions precedent must be filled – having already done so on three previous occasions.
As such the sale and purchase agreement had lapsed, with South Shore to instead refund a deposit paid by each of the three purchasers.
The collapse of the sale, which had promised to net the company HK$750 million, comes as a huge blow to South Shore given its ongoing financial concerns.
In April of this year it was forced to apply to its bank for a “standstill” to prevent enforcement of security over THE 13 and liquidation of the company after the bank issued a demand for immediate payment of HK$2.48 billion (US$320 million) owing under its facility agreement.
That demand, which covers the entire principal amount plus interest, was issued after the company was unable to pay HK$470 million (US$60.6 million) due on 31 March 2020, which it had previously anticipated would be sourced from the proposed sale.
South Shore didn’t explain on Tuesday exactly what prevented completion of the sale but outlined its intention to look for other buyers.
“The Company intends to continue with its endeavors to seek prospective buyer(s) for the Hotel and/or the Land and execute a sale of the Hotel and/or the Land, and will work with the bank (in relation to the term loan in the outstanding principal amount of approximately HK$2.84 billion (as at 31 March 2020) on any further remedial measures as appropriate,” it said.