Junket Operator Suncity Group Sells Two Subsidiaries for Less than $1

Junket operator Suncity Group is still reeling from the check of its former boss, Alvin Chau, and COVID-19 issues inwards Macau. To stoppage the financial hemorrhaging, it is letting tour of II business organisation units – for to a lesser extent than $1.

Suncity Group is starting time to fulfill its commission of reducing its step in say to lessen its financial overload. It announced before this month, after reporting $60 trillion inwards losses in conclusion year, that it would cut outside certain businesses inwards prescribe to regain financial ground. This comes after it shut away its travelling business sector and other activity to thin the strain.

In an declaration with the Hong Kong Stock Exchange yesterday, Suncity stated that it testament sell 2 groups of wholly-owned subsidiaries. While the sales price won’t position money inward its pockets, it will bring about long-term benefits. The junket manipulator is marketing the assets for a sum of HK$1.00 (US$0.13).

Losses Necessary to Realize Gains

Although the sales terms hardly registers as a blip on the radar, Suncity is looking at the bigger picture. In extricating the businesses from its portfolio, it testament free itself of unwanted debt that is weighing it down. The keep company will no more thirster live responsible for(p) for the debts and loans carried past the entities, which Suncity says equates to nest egg of around HK$127.8 meg (US$16.28 million).

Per the filing with the exchange, only an concord to sell the assets is inward place. The business deal is noneffervescent subject to normal regulatory oversight in say to be successful. Only and then testament Suncity obtain the benefits.

Great Promise Developments Ltd, a companion incorporated inward the Brits Virgin Islands, is the buyer, according to Suncity. That entity is owned by Zhong Jianhua, a man of affairs with manifest ties to ane of the loaning companies with which Suncity has dealings. Zhong reportedly owns 50% of that lender.

The group of companies Suncity will offer includes Shenzhen Sky Alliance, which has two salient loans. One has a principal amount of HK$366.92 billion (US$46.74 million) and is secured by loan receivables worth HK$613.68 million (US$78.18 million). However, Suncity asserts that recuperating those receivables inwards a well-timed(a) personal manner to pay for the loans is an insurmountable task.

The secondly loan, with a different lender, has a head amount of HK$220.15 jillion (US$28.04 million). In both cases, the involvement grade is simply 1.5%. However, both were due at the terminal of last-place month, with Suncity unable to keep upwardly with the payments.

Suncity’s Footprint Shrinks

There are a tally of sevener entities that testament transpose ownership through and through the agreement. Among them are holding companies, as fountainhead as businesses that care and operate malls and other commercial-grade properties inward China, Nihon and other Asian countries.

The holding companies, designated Disposal Groups type A and B, are not inward well(p) financial health. Disposal Group group A had unaudited, consolidated meshwork liabilities of HK$464.8 one thousand thousand (US$59.21 million) at the ending of utmost year. For the shoemaker's last ii years, it has reported consistent pre- and post-tax losses on its revenue.

Disposal Group b is in a similar situation. This aggroup had unaudited, consolidated network liabilities of HK$76.5 million (US$9.7 million) at the finish of 2021. Its pre- and post-tax losses on revenue weren’t as drastic as those of Disposal Group A, but relieve contributed to Suncity’s negatively charged financial situation.