Fresh cash call for Louis XIII Macau project

Macau, Slider 08 Nov 2013
Fresh cash call for Louis XIII Macau project

Another round of equity placing and convertible bonds planned

Investors in hotel and casino property developer Louis XIII Holdings (0577), which formerly traded as Paul Y Engineering, face a new round of fund raising, barely nine months after the company went cap in hand to its investors for funds for its luxury development project in Macau.

In a stock exchange notice released Thursday, the company said it intended to raise funds from equity placing and convertible bond private placements.

It did not indicate what level of funds was required to be raised.

“A number of potential investors, including certain existing shareholders and convertible bond holders of the company, have indicated their intention to participate in the proposed transactions,” the company said.

A further announcement would be made after it has finalised the terms of the funding arrangements.

Last February the company completed fund raising in which it raised HK$2 billion through placement of shares and HK$1.2 billion through issue of convertible bonds.

In the latest notice, the company also announced that it has received a letter of intent from a mainland China-based bank for debt financing for the Macau project.

The bank, which was not identified, will grant a credit facility for the amount of HK$3 billion while another facility for working capital in the amount of about HK$1 billion was also expected.

According to a stock exchange notice in January this year, the total cost of the development, including the cost of the land, was estimated at about HK$6 billion.

The proposed exterior facade for Louis XIII's luxury hotel and casino project   (Louis XIII Holdings)

The proposed exterior facade for Louis XIII’s luxury hotel and casino project (Louis XIII Holdings)

This capital outlay was to have been met by the first round of fund raising of HK$3.2 billion mentioned earlier with the balance to be funded by bank borrowings.

Assuming the banking credit facility of HK$3 billion is in the bag plus the HK$3.2 billion raised earlier, then it would appear Louis XIII has enough funds for the project without the need to do the latest round of equity placement and convertible bonds.

Two days ago, the company unveiled the exterior design for its luxury hotel and casino development in the Cotai area of Macau.

According to its lead architect Peter Marino, the proposed building will have an external façade looking like a giant red robe with a huge diamond like structure at the top.

The company’s proposed investment in Macau will hit its bottom line for the current financial year.

Last June, it issued a profit warning saying that it expected a loss for the year ending 31 March 2014 due to the Macau project because the project was not finished yet but the company had to book expenditure for the project.

Its construction business however was expected to record a profit.

Danny Chung

 

 

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