CEO Walt Power finds himself in a new position at South Shore Holdings Limited (SSH), as he has been removed from his position as CEO and executive director of the company, placed in a non-executive director role. It is a dramatic but unsurprising move by the company, following the challenges SSH has faced in getting their embattled luxury hotel, The 13, off the ground.
This move took effect May 1. Power has been with SSH since February 2013 and had served in some of its most important roles, including senior vice president of operations and chief operating officer at two of its casinos.
The 13, located in Macau, has become an albatross to the company, as years of delays and financial setbacks became a drain on the company’s holdings. The 13 was first proposed in 2012 but was not completed until August of last year. The hotel was planned to be the epitome of luxury, providing day spas, luxury suites, and hotels, as well as a health club.
Initially, a casino license was granted as part of the project, but SSH announced in early April that they had no plans to move forward with a formal agreement to create gambling at the resort. According to the company, no official agreement has been reached with any of the gambling concessionaires related to opening up gaming operations at The 13. This came just days after the company had announced that their self-imposed March 31 deadline to open a casino had passed.
The 13 venture cost the company $55.38 million in losses in the first six months. That was 18 times the loss the company reported in the same period of 2017.
While total revenue was up in 2018, surpassing $566 million, costs were way up as well. The total costs and liabilities exceeded $525 million. Most of the company’s revenue came from a subsidiary which generated $561 million in revenue, helping to improve the overall financial status of SSH.
However, it is believed now that SSH is looking for a new buyer. The challenges of funding the project as well as construction delays have turned this luxury hotel into a project that seems untenable to maintain.
While a buyer is sought, the executive team at SSH will now consist of chairman Peter Coker as well as deputy chair Tom Lau. It is not expected that a replacement will be named for Power, and his influence on future decision-making is likely to be non-existent.