Macau Legend warns it may not meet loan obligations

Macau Legend Development said it may be unable to meet its debt obligations if lenders demand immediate repayment, despite returning to positive adjusted EBITDA in the first half of 2026. The casino and hospitality group reported an unaudited net loss of HKD136.8 million for the six months ended June 30, narrowing sharply from HKD1.42 billion a year earlier.

Revenue from continuing operations rose 2.7% to HKD172.7 million, while adjusted EBITDA turned positive at HKD8.8 million.

The improvement came after Macau Legend’s satellite casino at Legend Palace on the peninsula ceased operations late last year.

However, the company’s balance sheet remains under severe pressure. It had net current liabilities of HKD2.68 billion at June 30, compared with HKD2.70 billion at the end of 2025, while cash and bank balances stood at HKD37.9 million.

Bank and other borrowings due within 12 months, or repayable on demand, totaled HKD2.39 billion.

The company said it remained in breach of covenants covering minimum net assets and its indebtedness ratio. A previous disposal of the group’s Laos operation had also triggered a covenant breach under one facility and a related breach under another.

“The Group has not received any demand for immediate repayment of the Group’s bank borrowings from the Banks,” Macau Legend said. “Notwithstanding this, […] the Group does not currently have sufficient financial resources to fulfill its obligations if the Banks take actions against the Group to exercise their rights to demand immediate repayment of the Group’s outstanding borrowings.”

Macau Legend said lenders and management had agreed in principle in August to restructure repayment dates and revise certain terms, although a formal agreement had yet to be signed as of the announcement.

Under an April 2025 variation agreement, repayment of HKD85.5 million was deferred to October 2026.

In addition, Macau Legend is also relying on shareholder support. Of its borrowings, HKD50 million is owed to a “substantial shareholder” without fresh written confirmation that repayment will not be demanded within the next 12 months. A further HKD289.4 million in shareholder loans is subject to written assurances that repayment will not be sought until the group can afford it.

The group said it was pursuing additional financing, revenue-generating measures and a cost-control program. It also warned that uncertainties surrounding lender support and shareholders’ financial capacity “cast significant doubt” on the group’s ability to continue as a going concern.

The company nonetheless said it had prepared the interim accounts on a going-concern basis, assuming its restructuring plans and financing measures succeed.