South Shore Holdings, owner and operator of troubled Macau hotel THE 13, says it has received a letter from the Hong Kong Stock Exchange outlining steps it must take to avoid being delisted.
In yet another setback for the company, the letter lists four key steps, including the publication of all outstanding financial results – currently delayed at South Shore’s request – and compliance with certain listing rules.
More difficult though will be meeting a requirement to have a winding up order against the company either withdrawn or dismissed and the appointment of liquidators discharged.
As reported by Inside Asian Gaming, the Supreme Court of Bermuda last month ordered that South Shore be wound up for failure to pay a HK$7 million (US$902,000) debt. The order came after PYI Management Limited issued a winding up petition in June in relation to the debt, accrued via a term loan facility agreement. PYI Management is a wholly-owned subsidiary of PYI Corp Ltd, which co-owns Paul Y. Engineering Group Limited (PYE) alongside South Shore.
Ernst & Young Transactions Limited and Edward Whittaker of R&H Services Limited were appointed as joint provisional liquidators of the company.
Under Hong Kong’s listing rules, the Stock Exchange may cancel the listing of any securities that have been suspended from trading for a continuous period of 18 months. With South Shore having suspended trading on 2 July 2021, that would mean its 18-month period expires on 1 January 2023.
However, it remains to be seen whether South Shore can survive that long given the multiple legal and financial challenges it faces.
They include a writ of summons recently issued in the High Court of Hong Kong relating to a statutory demand the company received from a lender to make payment of HK$3.28 billion (US$423 million) in outstanding loans and interest. That summons also came with the threat of a winding up petition.
In June, South Shore applied to the Macau court for voluntary liquidation of its wholly-owned subsidiary New Concordia Hotel Limited, the sole beneficial owner of THE 13 Hotel.
The application could see New Concordia declared bankrupt which in itself may result in South Shore being delisted from the Hong Kong Stock Exchange due to insufficient operations as required under listing rules.
The brainchild of long-departed Chairman Stephen Hung, THE 13 had been envisioned as an uber-luxury hotel with space for 66 VIP gaming tables aimed at capitalizing on Macau’s booming VIP segment of the early 2010s. Instead, a series of funding and construction delays saw the property open in September 2018 with no gaming and with a number of rooms unfinished – all at a cost of US$1.6 billion.
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