The 13 Holdings Ltd has activated two sale and purchase agreements for its majority-owned construction arm, with the HK$300 million disposal to provide funding for completion of long-awaited luxury Macau hotel The 13.
But it seems the company’s recently revised April launch date has already been scrapped with 30 June 2018 now the target for welcoming first guests.
In a filing to the Hong Kong Stock Exchange, The 13 Holdings said it was pushing forward with the sale of its 51.76% stake in Paul Y Engineering Group Limited – first announced last June – due to depleted funds and the need to push ahead with the final fitout. Property development firm ITC Properties Group Limited is the primary buyer.
“To implement the revised corporate strategy which is to develop and operate The 13 Hotel, the board believes it is timely for the disposal to take place so that the management team can focus more of their time on the hotel management business of the group and the group’s resources can be effectively utilized for the hotel management business after the opening of The 13 Hotel,” it said.
“Furthermore the deposits paid as part of the consideration have provided short term relief in financing part of the pre-opening expenses of The 13 Hotel and working capital of the group.”
The 13 Holdings revealed that its cash balance as of 30 September 2017 was down to just HK$17 million. It recently wrapped up a subscription offer for rights issue shares aimed at raising HK$973 million but is yet to realize any resulting funding.
Originally planned to open in late 2016, The 13 Hotel has suffered a series of delays over the past 18 months that have resulted in multiple changes to its planned opening dates. It is now 12 months since its 31 March 2017 launch was changed to 31 July, only for a lack of funds to see major construction work halted completely. Work recommenced in November with 31 March 2018 named as the new target date but that was revised to 30 April earlier this year. The company’s latest filing indicates that it doesn’t expect to receive necessary licenses from the Macao Government Tourism Office until June 2018.
Nevertheless, The 13 Holdings reaffirmed its intention to position The 13 Hotel as an ultra-luxury property focused first and foremost on the premium mass segment.
“The business strategy of The 13 Hotel is founded on being a noticeably differentiated product at the high-end of the global luxury market,” it said.
“The management seeks to position The 13 Hotel to appeal to customers who are seeking a true luxury experience that is bespoke and personalized. With the opening of two large hotel and entertainment complexes in Macau in 2016, the Group holds the firm belief that product differentiation is key to distinguishing The 13 Hotel from its competitors, and hence the group’s strategy is to focus on concentrated luxury with a complete emphasis on product, branding and the services to be provided at The 13 Hotel, a strategy which it believes competitors will not readily be able to replicate.
“Further, all guests of The 13 Hotel will be provided with the same exceptional level of service during their stay, from Rolls-Royce pick up to 24 hour butler service. While the Company’s brand message is targeted at ultra-high net worth individuals, the Company’s core customers are premium mass customers who would not necessarily receive VIP treatment at larger casinos in Macau.”
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