Macau 13 Faces Insolvency After Creditor Demands $ 423 Million Payment
Posted: Jun 5, 2021, 2:29 p.m.
Last update on: June 5, 2021, 6:56 a.m.
Macau 13, a $ 1.6 billion tax disaster, is approaching bankruptcy after one of its major creditors asked the resort’s parent company for immediate repayment.
In securities filings with the Hong Kong Stock Exchange, South Shore Holdings Limited – the owner and operator of The 13 – said it was notified by a lender of the repayment of HK $ 3.28 billion ($ 423 million) . Although the file did not specify the creditor, it is likely to be Wise Park Business Limited, which granted South Shore a large loan in 2018.
If the Company does not repay the debt within three weeks of the date of service of the legal demand, the creditor may submit a petition for liquidation against the Company, ”explained the South Shore notification. “The Company is considering seeking legal advice in this regard. As the board of directors only recently received the statutory request, it will take some time to assess the situation. “
The 13 has remained closed since the start of the COVID-19 pandemic. The property is not currently taking reservations and all of its retail stores and restaurants have closed.
The 13 never came close to the grand flamboyant vision of Hong Kong businessman Stephen Hung.
Hung came up with the concept of a 201-room, fully-VIP-focused boutique hotel and casino at the height of Macau’s business activity in 2013. The Special Administrative Region of China had just emerged from a record-breaking year of six licensed commercial casino operators have won over $ 45 billion from players.
But Chinese President Xi Jinping, concerned about massive capital movements to Macau, a Chinese enclave considered a tax haven, has ordered law enforcement to crack down on VIP groups. The removal caused gross gaming revenue to drop to less than $ 28 billion three years later.
Hung, however, continued with his $ 1.6 billion casino complex. The location was far from ideal, located more than a mile south of the Cotai Strip, where large-scale, multi-billion dollar integrated resorts are the playgrounds of the biggest rollerbladers. To make up for the location, Hung purchased 30 custom Rolls-Royce Phantom vehicles at a cost of $ 20 million.
The 13 finally opened in September 2018 as a game-free hotel. Bookings were light, with South Shore reporting that on average only 16 of its rooms were booked nightly at the property in its first 12 months.
The Rolls were sold at a great price in June 2019. Hung was ultimately ousted from South Shore.
Due to the disastrous performance and shutdown of The 13 since the start of 2020, South Shore shares have become almost worthless. The stock is worth less than a cent at $ 0.007.
At the height of South Shore’s valuation in 2014, shares were trading at $ 13.