South Shore Holdings Limited has announced that the disposal of a 50 per cent share of The 13 Hotel controlling company has fallen through after the required conditions set out for the sale were not fulfilled.
In November 2019 South Shore announced that it had reached an agreement to dispose of a 50 per cent share in The 13 Hotel for HK$750 million (US$95.6 million), losing ownership of the property but maintaining a role in its management.
The sale agreement involves Falloncroft Investments Limited, a wholly-owned a subsidiary of South Shore, which was to sell 50 per cent of the share capital in Uni-Dragon Limited – the disposal company that indirectly holds The 13 – to three companies, Fine Intellect (20 per cent); All Fame (20 per cent) and Ease Link (10 per cent).
However after several delays and extensions, South Shore indicated that the Conditions Precedent have not been fulfilled (or waived) and ‘no agreement was reached by the Vendor and each of the Purchasers to further extend the Long Stop Date, the Sale and Purchase Agreements have lapsed’.
The proceeds of the sale were intended to be used by South Shore to help repay an outstanding principal amount amounting to some HK$2.84 billion, with the company stating that it ‘intends to continue with its endeavours to seek prospective buyer(s) for the Hotel and/or the Land and execute a sale of the Hotel and/or the Land, and will work with the bank on any further remedial measures as appropriate.
South Shore Holdings Limited is a hospitality, entertainment and construction group responsible for The 13 Hotel in Cotai but with most of its business linked to Hong Kong developing group Paul Y. Engineering Group Limited.
The company has reported a 16 per cent year-on-year rise in revenues for the year ended 31 March 2020 to HK$10.8 billion, but its hotel segment recorded total liabilities of approximately HK$5.2 billion.
The 13 Hotel temporarily suspended operations in February due to the pandemic and has remained closed since according to the Macao Government Tourism Office (MGTO).