South Shore Holdings Limited indicated that after an initial failure to repay an HK$470 million (US$60 million) demanded by a bank, on April 1 the same entity accelerated its demand for all additional principal and interest amounting to some HK$2.4 billion, a filing at the Hong Kong Stock Exchange explained.
The company noted that neither the borrowing entity – a wholly-owned subsidiary o the Company – South Shore as the guarantor can repay the total HK$2.9 billion this time.
‘The Company has applied to the bank for a ‘standstill’, in essence seeking assurances from the bank that it will not take imminent steps either to enforce its security over The 13 Hotel or to liquidate the Company, and envisages working closely with the bank to achieve an orderly divestment of the Company’s interests in The 13 Hotel,’ South Shore noted.
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).
The company previously intended to use the proceeds of the sale of a 50 per cent share in its subsidiary that beneficially owns The 13 Hotel to repay the loan, however the deal has been again delayed to June 14 of this year.
South Shore also informed that Francis Goutenmacher and Johnny Chan Kok Chung, resigned as Independent NonExecutive Directors of the Company with effect from April 6 2020.
The 13 Hotel officially opened on August 31, 2018, although occupancy rate as been around 8 per cent according to previous company reports.
The hotel has remained suspended since the Covid-19 outbreak, with South Shore stating it would remain so in the foreseeable future.