Jailed Macau junket king Alvin Chau is in danger of losing control of Suncity Group Holdings after defaulting on a $40 million loan.
But Suncity’s Philippine subsidiary, Suntrust Home Developers, assured its shareholders Chau’s latest financial trouble has no effect on the convertible bonds issued to Fortune Noble and SA Investments.
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Suncity’s Fortune Noble, which owns 51 percent of the outstanding capital of SUN, holds P7.3 billion in bonds in May 2020; and Summit Ascent Investments holds a total of P12 billion in SUN convertible bonds.
Two weeks after Chau’s arrest for illegal cross-border gambling and money laundering, his company Star Soul Investments Limited failed to pay a HK$316.6 million ($40.2 million) loan and was declared in default.
Chau had pledged 4.99 million shares or 75 percent of Suncity to Star Soul’s lenders and SUN said it was clueless on what the lenders would do with the pledged Suncity shares.
But it admitted that the default could lead to a “change in control of Suncity Holdings and consequently of SUN.”
“As at the date of this announcement, the above development has no effect on the convertible bonds issued to Fortune Noble and SA Investments,” said SUN.
SUN had previously stressed it does not have any commercial operations and Lau’s arrest (and closure of VIP operations in Macau) would not derail the ongoing construction of its 5-star hotel and casino complex at the Westside City project in Manila’s Entertainment City zone. SUN said the main hotel casino would start operations in 2023.
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SUN said it has P7.7 billion in cash and cash equivalents as of September 2021 to support construction and working capital requirements.
Chau’s 34 percent partner in SUN is Megaworld of bilyonaryo Andrew Tan.