Macau’s The 13 Leaps Out Of The Frying-Pan Into The Fire
As they say, the name shapes destiny. This expression had to be tested and proved to one of the most unlucky gambling names: The 13 casino operator. Perhaps the owners of the house wanted to emphasize the inconstancy of luck in gambling. Nevertheless, the gaming service suffered a series of setbacks and disappointments. It was initially created as an exclusive platform that could occupy its unique niche in the Macau market.
Investors wanted to create a series of assets: a hotel, casino, and additional facilities that would attract wealthy players’ attention. The operator managed to stand out from other gambling companies. However, this is more about notoriety than success. From the first steps, the parent company, South Shore Holdings, witnessed a series of problems with establishing work in The 13. Over time, the management of a large holding ran out of patience. Last year, investors decided to sell the business to cover some of the losses.
In November 2019, the owners practically agreed on a 50% sale of their assets for almost $96 million. The resulting profit should have helped to reduce the accumulated losses and recoup investments. However, an unfortunate name or set of circumstances scuttled the deal.
According to official information published by the owner, one of its subsidiaries, Uni-Dragon, terminated the preliminary agreement to buy 50% of the shares. The reason for the deal’s failure was that the company and potential buyers for the third time could not come to a final agreement. After the expiry of the preliminary sales contract, all prior negotiations were invalidated. Moreover, initial deposits made to the asset owner’s account should be returned as soon as possible. There is no doubt that The 13 turned out to be nothing more than a continuous series of failures and lost investments for South Shore. The failed deal was far from the only disappointment that awaited the owner’s company. The bank, which invested part of the funds in developing the project, demanded to immediately return more than $320 million and repay the credit line allocated to South Shore.
Otherwise, the bank has already notified that it can seize the holding’s property to recover the required amount. The gambling operator tried to delay the loan repayment until the sale of at least part of the unsuccessful asset shares. Perhaps now that the deal has fallen through, the company will have no arguments left over to postpone massive debt repayment.
The first attempt to launch The 13 was made in August 2018. However, from the early days, the operator faced a lack of funding and the numerous difficulties. Even after the official opening, the hotel was still partially unfinished. The area that was intended for the gambling hall was unused due to the lack of a license. Signing a supplemental agreement with Melco Resorts and Entertainment to support gambling operations also did not bear fruit. One way or another, the game room was never launched.
South Shore is currently in a challenging situation. However, it is unlikely to give up until it finds a worthy buyer on The 13. The management will need to make every effort to find a potential buyer for the hotel and land. On March 31, 2020, the holding has already announced that expenses on the bank and other loans have reached more than $44 million. The costs on convertible bonds exceeded $19.61 million. The brand is facing a tough time, given the Covid-19 restrictions far form the end.
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