Developer of The 13 requests a ‘standstill’ for being unable to pay debt

The developer and promoter of the troubled The 13 Hotel has requested a standstill from its bank to avoid the enforcement of security and liquidation of the company, after the bank required the firm to make an immediate payment of HKD2.48 billion.
The amount includes the entire principal amount with interest and follows the amount of HKD470 million, which was supposed to be paid to the bank on March 31.
South Shore Holdings issued a statement this week admitting that the firm could not repay the debt, noting that neither “the borrowing entity nor the company can repay it at this time.”
It revealed that it has applied for a standstill to the bank and that it is “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.”
The company also stated that it has reached an agreement with the prospective buyers of the 50% stake in hotel to extend the long- vstop date from April 14, 2020 to June 14, 2020.
The move was made in order to ensure fulfillment of certain conditions under the Sale and Purchase Agreement.
However, it noted that the recent delays were due to the “severe adverse effect of the Covid-19 pandemic on the state of the market, in Macau and generally.”
In October last year, South Shore announced that it had an agreement that could lead to the disposal of a 40% interest in the subsidiary that owns the hotel project in southern Cotai.
The stake was valued at HKD750 million.
In August last year, South Shore revealed that it was in discussions regarding the disposal of a 60% stake in the subsidiary with an associate of a substantial shareholder of the company. The 13 Hotel held a partial opening in late August of 2018 without a casino. The troubled property was originally scheduled to open by the end of the first quarter of 2017, but the operating firm postponed its opening several times.
Touted as the “world’s most luxurious hotel,” the hotel partially opened in August of 2018, when 200 duplex suites and villas became available.
The hotel complex had already been a huge drain on South Shore Holdings. The company previously announced that in the six months prior to their September 30, 2018 filing that they had lost USD55.38 million. This loss was 18 times more than their loss at the previous point in 2017.