The company behind an unfinished Macau casino-hotel for Asia’s 1% saw its shares lose over 50% of their value after reports that the company was seeking a serious cash injection.
On Friday, The 13 Holdings Ltd informed the Hong Kong Stock Exchange that it planned to raise up to HKD 1.7b (US $218m) through a combination of a rights offering and debt financing. Later that same day, trading in the company’s shares was halted after their value plummeted 52%.
The company, which is run by flamboyant Hong Kong investment banker Stephen Hung, said the extra financing was needed in order to complete its über-luxurious Macau hotel project, The 13, by March 31, 2018. The project originally planned to open in 2016.
In June, The 13 Holdings announced that it was selling its 51.6% stake in its construction arm, Paul Y Engineering Group Ltd (PYE), for HKD 300m. The company acknowledged that this PYE fire sale would force it to record a loss of HKD 338m but claimed the divestiture would help streamline management’s focus on completing the hotel.
The company stated that its “intention is to include gaming operations” in the 13, but acknowledges that its ability to offer gaming at the property “remains an uncertainty.”
The 13 continues to hint at its deal with an unidentified Macau casino “Licensed Operator” which The 13 claims will eventually submit an application to conduct gaming operations at The 13, but which can only be submitted after The 13 launches its hotel operations.
Regardless, The 13 maintains that even if gaming operations never launch, this “will not affect the opening and the hotel operation of The 13 Hotel.”
Of course, why any self-respecting VIP with that kind of money to spend would choose to stay at a Macau hotel that required him (or her) to travel outside the property to gamble remains unexplained.
The 13 began life under the not-at-all off-putting brand Louis XIII, reflecting the company’s desire to cater to the crème de la crème of VIP gamblers. The company claimed its largest hotel space would cost $130k per night while its invitation-only retail component’s cheapest baubles would cost a minimum $1m.
Trouble is, all this conspicuous consumption was conceived before Beijing launched its corruption crackdown in early 2014, and Macau’s ensuing 26-month streak of gaming revenue declines left The 13 with a string of missed opening deadlines and a fleet of pricey Rolls-Royce Phantoms with no passengers. But hey, cool video…