South Shore Holdings may lose engineering arm due to accrued debt

Home » South Shore Holdings may lose engineering arm due to accrued debt

Operated of The 13 Hotel in Macau, South Shore Holdings could lose its engineering company in the near future due to accrued debts. Paul Y. Engineering Group Limited is set to be taken over by a lender to South Shore after it was revealed the lender decided to use its right to sell all shares in a subsidiary of the operator.

On Sunday night, information regarding the actions by the lender was made public. The lender is demanding that the company pay its outstanding loans in full. The amount of the loan totals HK$593 million ($76.4 million).

More Details

South Shore asked for trading to stop late last week and as trading was set to resume, a filing revealed that the company had been sent a letter from Wise Park Business Limited on May 13. The letter stated the company was ending the continued renewal of a loan it provided. They expected full reimbursement of the amount along with interest by the next day.

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The company could not pay the large loan amount and a second letter was sent by Wise Park by May 18. The letter confirmed that it had used its loan agreement rights to takeover The 13 (BVI) Limited. This is a subsidiary of the 13 Hotel (BVI) Limited.

The lender also stated that it had reached a deal to sell shares for HK$150m ($19.3m). The funds from the sale would go towards the loan debt, but Wise Park still wants to be repaid the full loan amount or legal action will be taken against South Shore.

Losing the Engineering Company

The engineering group owned by the company is linked to 13 (BVI) Limited. According to South Shore, it is likely that the engineering group will no longer be a subsidiary of the company.

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The loan that is part of the issue is one connected to the development and opening costs of The 13 Hotel. The company took out the loan in late 2016 with Evo PE Opportunities. It was then transferred to Wise Park by 2018.

The issue regarding the loan payment and potential loss of the engineering company comes just a few days after South Shore revealed that it expects to see a more than $122 million deficit for the 12-month time frame ending in March.

Trading in shares was suspended due to the pending release of the annual financial results. The shortfall is better than the $131.3 million loss in the previous 12-month time frame, but still a major hit to the company.

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