Union Gaming Securities Asia Ltd. announced in a note that the launch of the long-awaited hotel project The 13 might be postponed. The Macau located venue which allegedly is going to have a casino on its premises as well is expected to open to the public at the beginning of 2018.
Grant Govertsen, an investment analyst said that this delay in the launching is because of the time it might take to start anew the effectively stalled project. The hotel is located on the border of the Cotai and Coloane districts in Macau and it suffered some delays in the process of construction. The 13 Holdings filed an interim report in December, according to which the development of the property was on track and it was expected to open for business in the first quarter of 2017. Later in March, the company announced the opening date for the property would be announced later in the year.
According to Govertsen, the promoter of the scheme, The 13 Holding announced its annual results what amounts to further delays with respect to the company’s casino project opening in Macau. In the results, the company has shown evidence that as of the 31st of March its current liabilities exceed its assets by HK$300.9 million (US$38.5 million). Moreover, the holding had contracted a total amount of HK$369 million in capital commitments which are not provided for in the consolidated results.
In a previous statement, The 13 Holdings had said that in order to build a single room, the company should pay more than US$7 million in average. In order to finish the construction of all of the rooms in the property more than US$1.4 billion should be spent. The project description of The 13 says it is going to be an all-villa hotel with a total of 200 accommodation units. Union Gaming also added that the annual results showed that there is a funding gap present in the project, which is yet to be resolved so that the construction can continue.
The group also added that the liquidity of the group needs to be improved and its directors were negotiating to do so. According to them, they will have enough working capital to fund the operation and keep the project active. The firm also added that some of the potential improvements which could be done in this situation are to look for new sources of financing in the form of debt or equity. As of this moment, the amount of funding needed is not disclosed by the holding, but Union Gaming suggests it can be very expensive in the case of debt.
