Macau’s The 13 sets March 2018 Opening Goal Amid Hotel Default Fears, Confirms Casino Ambitions

22 Oct 2017

Macau’s The 13 sets March 2018 Opening Goal Amid Hotel Default Fears, Confirms Casino Ambitions

The 13 Holdings has revealed a revised opening date of “on or before” 31 March 2018 following the announcement of a proposed issuance of rights issue shares to the value of HK$973 million, which the company says will be “be sufficient for completion of The 13 Hotel.”

In an announcement to the Hong Kong Stock Exchange detailing what appears to be a last-ditch “Hail Mary” fundraising attempt, The 13 Holdings outlined its intention to use the net proceeds from the rights issue – which would see the total issued share capital of the company increase by 50% – to settle the remaining pre-opening expenses of The 13 Hotel. Those expenses include costs related to decoration, furniture, fixtures and equipment, operating supplies and equipment and other hotel operation preparation costs.

The company was previously granted a temporary HK$300 million bridging loan in December, which will also be repaid via the rights issue – itself dependent upon shareholders approving a capital reorganization of the company.

If successful, the ambitious plan would see The 13 Hotel open 12 months late, having originally been scheduled for a 1Q17 launch. Work on the interior fit-out has been halted since July.

Nevertheless, The 13 Holdings also confirmed its desire to include a casino inside the hotel following recent questions over its failure so far to apply for a gaming table allocation from the Macau government.

“The company’s intention is to include gaming operations in The 13 Hotel as soon as practicable, subject to the progress of the licensed operator in submitting an application for and obtaining approval for the gaming operation after the licenses for the operation of The 13 Hotel have been granted or when it is clear such licenses are almost certain to be granted as a matter of procedure,” it said.

“The authorization to install and operate a casino in The 13 Hotel is subject to the approval of the Macau Government and therefore its success remains an uncertainty. However, the company would like to reiterate that although it is the company’s intention to include gaming operation in The 13 Hotel, it is subject to, among other things, the entering into a formal agreement between the company and the licensed operator and the approval of the Macau Government, and as such, gaming operations may or may not commence at The 13 Hotel, but will not affect the opening and the hotel operation of The 13 Hotel.”

The 13 Holdings said it had entered into a Memorandum of Understanding (MOU) with an affiliate of a Macau concession or sub-concession in April 2008 in relation to the management and operation of a casino proposed to be opened in The 13 Hotel. It added that the affiliate had sent a confirmation letter in November 2010 and another in September 2012, and that it expects a formal agreement to be signed subject to the licensed operator gaining approval from the government to proceed.

But whether the company reaches that point remains to be seen, with the company itself suggesting the rights issue is now its final opportunity to complete construction and avoid defaulting on current bank loans. The 13 Holdings previously attempted to raise funds in April 2016 through the issue of high yield notes but failed to find a lender. In June, an investment bank cancelled its interest in possible high yield notes financing via a second mortgage after conducting due diligence work. That same month shareholders also rejected a proposal for an equity or convertible bonds placement.

As a result, The 13 Holdings says that it has “no further options but to proceed with the rights issue as the only viable option that can be executed on a timely basis.

“The board believes it would demonstrate to the respective lenders under the existing bridge loan and the HK$3.05 billion facility agreement that the group is able to comply with its obligations under the respective facility agreements (one of which required the Group to open the hotel by 31 July 2017, but the rolling back of which date remains under current discussion with the lending bank) in order to avoid triggering any default of the loans and meet the urgent financing required to complete and open The 13 Hotel.”

The 13, with an original estimated a cost of US$1.4 billion, has been billed as the most luxurious hotel in the world including 200 “all-villa” suites ranging from 2,000 to 30,000 square feet, 24-hour butler service and a fleet of 30 custom made red Rolls-Royce phantoms – the largest single order in Rolls-Royce history.

However, costs have since ballooned with the group attributing the blowout to prolonged licensing processes with the Macau Government, upgraded designs for the second stage fitting-out works and difficulties with labor recruitment.

Source: http://www.asgam.com/news/item/3815-the-13-sets-31-march-2018-opening-goal-amid-default-fears,-confirms-table-game-ambitions.html

Save the Date
Register for Free Now

Exhibitor Login

Stand Enquiry

We use cookies to operate this website and to improve its usability. Full details of what cookies are, why we use them and how you can manage them can be found by reading our Privacy & Cookies page. Please note that by using this site you are consenting to the use of cookies.