Shares of 13 Holdings Ltd., the Hong Kong company that wagered USD1.6 billion on a luxurious casino and hotel aimed at China’s ultra rich, fell to their lowest level in more than 21 years after announcing a stock sale to help fund the project.
The hotel developer plans to raise HKD1 billion (USD128 million) in a rights offering and as much as HKD740 million in addition through debt, according to a stock exchange statement late Friday, confirming a Bloomberg News report. The company’s market value plunged by almost half to $55 million in Hong Kong trading yesterday.
13 Holdings’ shares declined 49 percent to close at HKD0.465, the lowest price since April 1996. The stock was halted on Friday pending the announcement. Today’s decline extends the stock’s tumble to about 80 percent this year.
13 Hotel stands empty in a sleepy corner of Macau.
The company, which has raised more than $1 billion for the project, has struggled to open the hotel that was originally designed to lure Chinese high-rollers with $1,500-a-night suites with Roman baths. Gaming revenue from VIPs probably grew about 19 percent last month in Macau, faster than the estimated 13 percent increase for mass-market gamblers, according to monthly estimates from IMC.
The funds, together with a HKD250 million bridge loan, would allow the company to open the 13 Hotel by the end of March next year.
Get Nice Finance agreed to provide 13 Holdings a one- year loan of HKD250 million, according to a stock exchange statement on Oct. 19. The loan, to be used for non-construction costs for the completion of the hotel and general working capital, carries an annual interest rate of 18 percent. Daniela Wei, Bloomberg
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