More Problems for Suncity Group as Lenders Call
The shares of Macau gambling group Suncity Group Holdings (HKG: 1383) are set to fall 5.8 percent today after it admitted on Friday that lenders have started demanding full repayment of loans issued to the group’s former director and chairman, Alvin Chau.
The loan was received by Star Soul Investments and guaranteed by Alvin Chau. Last week, the Suncity group director resigned after he was arrested alongside 11 people by Macau authorities for alleged cross-border gambling and money laundering-related crimes.
According to the Friday announcement, Wooco Secretarial Services, an agent acting on behalf of the lenders, had sent a letter to the group stating a default under a facility agreement caused by Chau’s arrest and demanding full repayment of loans plus interest, running into a combined HK$313,610,959 (US$40.2 million), within five business days from 8 December 2021.
Failure of Suncity Group to pay the loan would see Wooco take legal action to secure repayment by taking ownership of the group’s various securities for disposal like the 4,991,643,335 Suncity shares – constituting a controlling 74.85% stake – currently held by Fame Select Ltd.
Amongst other securities that the syndicate would likely seize to cover the loan include the HK$402 million convertible bonds held by Fame Select and convertible into 1,546,153,846 Suncity shares, HK$177 million convertible bonds held by Chau’s wholly-owned Star Hope Ltd, and convertible into 196,666,666 Suncity shares, and HK$120 million convertible bonds held by Suncity executive Director Andrew Lo Kai Bong and convertible into 133,333,333 Suncity shares, and the entire issued share capital of Fame Select and Star Hope.