The 13 Macau, a $1.6 billion fiscal disaster, is inching closer towards bankruptcy after one of its leading creditors issued a demand to the resort’s parent company to be immediately repaid.
In securities filings with the Hong Kong Stock Exchange, South Shore Holdings Limited — the owner and operator of The 13 — says it has been notified from a lender for the repayment of HK$3.28 billion ($423 million). Though the filing did not specify the creditor, it’s suspected to be Wise Park Business Limited, which granted South Shore a large loan in 2018.
If the Company fails to repay the debt within three weeks from the date of service of the Statutory Demand, the creditor may present a winding up petition against the Company,” the South Shore notification explained. “The Company is considering taking legal advice in this regard. As the Board has only recently received the Statutory Demand, it will take some time for the Board to assess the situation.”
The 13 has remained closed since the onset of the COVID-19 pandemic. The property is not currently taking reservations, and all of its retail shops and eateries have shuttered.
The 13 never came anywhere close to the grand vision flamboyant Hong Kong businessman Stephen Hung intended.
Hung came up with the concept for a completely VIP-focused 201-room boutique hotel and casino at the height of Macau’s junket business in 2013. The Chinese Special Administrative Region was fresh of a record-setting year where the six licensed commercial casino operators won more than $45 billion from gamblers.
But China President Xi Jinping, concerned with the mass movement of capital to Macau, a Chinese enclave that is considered a tax haven, ordered law enforcement to crack down on VIP junket groups. The suppression resulted in gross gaming revenues dropping to less than $28 billion just three years later.
Hung, however, pressed on with his $1.6 billion casino resort. The location was far from ideal, located more than a mile south of the Cotai Strip where the multibillion-dollar large-scale integrated resorts are the playgrounds for the highest of rollers. To make up for the location, Hung purchased 30 custom Rolls-Royce Phantom vehicles at a cost of $20 million.
The 13 finally opened in September of 2018 as a non-gaming hotel. Bookings were light, South Shore reporting that an average of only 16 of its rooms were booked nightly at the property in its first 12 months.
The Rolls’ were sold off at a deep discount in June of 2019. Hung was eventually ousted from South Shore.
Due to The 13’s disastrous performance and closing since early 2020, shares of South Shore have become nearly worthless. The stock is worth less than a cent at $0.007.
At the height of South Shore’s valuation in 2014, shares were trading at $13.
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