The 13 Holdings Ltd has offered no guarantees it will open its luxury Macau hotel The 13 by its scheduled 31 July deadline, with a decision on obtaining a deadline extension to be made by mid-July.
The news forms part of the company’s financial results for the full year ended 31 March 2017, released on Friday, which saw a net loss of HK$40.2 million.
Results as a whole were considerably better than 12 months earlier, with the group’s net loss representing an 82.7% improvement on 2016’s loss of HK$232.8 million, while gross profit was up 25% to HK$247 million.
However, in its filing to the Hong Kong Stock Exchange, The 13 Holdings Ltd acknowledged the possibility of having to extend the 31 July deadline for opening its Macau property as per the terms of its HK$3.02 billion loan.
“If in mid-July the Group anticipates that the hotel cannot be opened according to the above schedule, the directors of the Company will obtain an extension of the opening date under this covenant,” it said. “The Group has successfully applied for an extension from 31 March 2017 to 31 July 2017, in mid-March 2017. Therefore, the directors of the Company do not expect the application of further extension will be withheld by the relevant bank.”
The 13 Holdings Ltd announced last week that it was currently in the process of obtaining licenses and hiring operational staff for its soft opening currently planned for later this month.
It also announced the sale of its stake in The 13’s construction company Paul Y Engineering Group Limited to raise HK$300 million for the hotel’s completion “including costs related to furniture, fixtures and equipment, operating supplies, inventories and staff costs, debt servicing and the general working capital of the Group.”
In its 2017 revenue results, The 13 Holdings Ltd said it was confident it would have sufficient working capital to finance its operations and to meet its financial obligations for at least the next 12 months.
But the company said its long-term security was far from assured with its current liabilities exceeding its current assets by HK$300.9 million.
“In addition, the Group had capital commitments contracted for but not provided in the consolidated financial statements of HK$369,009,000,” it said.
“The directors of the Company are considering and negotiating a number of financing measures to improve the Group’s liquidity and financial position and consider that the Group will have sufficient working capital to finance its operations and to pay its financial obligations as and when they fall due in the foreseeable future upon successfully implementing these measures.
“However, these conditions, along with other matters … indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.”
