South Shore Holdings Limited indicated that a bank has demanded immediate payment of overdue interest in an HK$71 million (US$9.1 million) term loan facility, a filing at the Hong Kong Stock Exchange indicated.
The undisclosed bank also warned that enforcement steps will be taken without notice in the event of a failure to repay with a possible further interest of HK$470 million on March 21.
South Shore indicated that it expects to repay the loan out of proceeds of the sale of a 50 per cent share in its subsidiary that beneficially owns The 13 Hotel.
In November last year South Shore announced it had reached an agreement has reached an agreement to dispose of a 50 per cent share in The 13 Hotel held by an indirectly owned subsidiary for HK$750 million to three companies, Fine Intellect (20 per cent); All Fame (20 per cent) and Ease Link (10 per cent).
However, South Shore now indicated that it is still looking to complete the sale but that it would likely have to request for an extension to the long stop date on April 14.
The 13 Hotel has also remained suspended since the Covid-19 outbreak, with South Shore stating it would remain so in the foreseeable future.
‘As the operation was still loss-making, the closure has the effect of saving on costs,’ the group noted.
The 13 Hotel officially opened on August 31, 2018, although occupancy rate as been around 8 per cent according to previous company reports.
South Shore reported losses attributable to owners of the company have risen 15 per cent year-on-year to some HK$507 million in six months period finished on September 30 of 2019.
Such losses were attributted to an increase in finance costs, depreciation and amortization charges and hotel operation expenses for the hotel segment compared with last year.