The 13 Holdings Limited has disposed of 51.76 per cent of the total issued shares of Paul Y. Engineering Group Limited, a subsidiary of the company responsible for the construction of its flagship hotel in Cotai, The 13, according to an announcement by the company with the Hong Kong Stock Exchange on Wednesday after trading hours.
The 13 Holdings claims the sale, struck for a total consideration of HK$300 million (US$38.42 million/MOP309 million), ‘provides funding to finance the completion of the facilities and amenities of The 13 Hotel as well as pre-opening costs.’
The company also estimated that it would record a loss on the disposal of Paul Y. Engineering of nearly HK$388 million.
The sale constitutes a connected transaction of the company involving two purchasers, both subsidiaries of ITC Properties Group Limited (ITCP).
Pursuant to the deal, Precious Year, a direct wholly owned subsidiary of ITCP, has acquired 45.76 per cent of the issued share capital of Paul Y. Engineering for HK$265.2 million.
Tycoon Bliss, a company wholly owned by Mr. Chan Fut Yan, an executive director of Paul Y. Engineering and of ITCP, has acquired another 6 per cent of The 13’s constructor for a total consideration of HK$34.8 million.
The 13 Holdings further noted that the sale constitutes a timely transaction ‘so that the management team can focus more […] on the hotel management business of the group and … resources can be effectively utilized for the hotel management business after the opening of The 13 Hotel.’
Opening delay confirmed
In a separate filing with the Hong Kong Stock Exchange on the same day the company signalled that it expected to open The 13 Hotel in the second half of 2017 – while noting in the earlier filing that the ‘senior management of The 13 Hotel is in place while hiring of functional staff is in process.’
It further reiterated that the occupation permit for the premises of the hotel had been issued on March 29, 2017 and that they were ‘in the process of obtaining necessary licences and approvals for operation of the Hotel and related activities.’
In previous filings, the group announced it was planning to open the hotel at the end of July 2017.
In the same filing, The 13 reported a net loss of roughly HK$45 million for the year ended 31 March 2017, mainly attributable to ‘the absence of one-off pre-opening expenses in relation to hotel under development segment as recorded in last year and decrease in legal and professional fees.’
The amount represents a decrease of nearly 77 per cent from the HK$197-million loss recorded in 2016.
The group recorded revenue of HK$6.12 billion for the period, down 10.1 per cent year-on-year.
The company also recorded an increase in gross profit amounting of some HK$247 million, compared to HK$198 million collected in 2016.