Genting Hong Kong, hit hard by the Covid-19 pandemic, has sold its subsidiary, the Zouk Group, operator of the popular nightclub, for HK$79.3 million (RM42.4 million).
The Singapore-based group was sold to Malaysian firm Tulipa as part of efforts to offload non-core assets and generate liquidity for the cash-strapped firm, The Straits Times reported.
The proceeds of the disposal are expected to result in a gain of HK$6.7 million, which will be used as the group’s working capital, GEN HK said in a filing with Hong Kong’s stock exchange.
Tulipa is wholly-owned by Lim Keong Hui, son of Tan Sri Lim Kok Thay, who is the group’s single largest shareholder with a 76% equity stake.
GEN HK said Zouk Group engages in the operations of discotheque, restaurant and lounge under the name “ZOUK”. As at July 31, the unaudited consolidated net asset value of Zouk Group was HK$72.6 million.
The cash sale is expected to result in a gain of about HK$6.7 million.
Tulipa is owned by Lim Keong Hui, the son of Genting Hong Kong’s controlling shareholder, Lim Kok Thay.
Genting Hong Kong had earlier suspended payments to creditors due to cash flow problems resulting from the Covid-19 pandemic. It said it had to use its available funds for services critical to the company’s operations.
Bloomberg had reported last month that Kok Thay, chairman of the Genting group, had pledged almost his entire stake in Genting Hong Kong as collateral for loans after the firm suspended payments to creditors.
Zouk ranks among the top nightclubs in the world. It was sold to Genting Hong Kong in 2015.
The Zouk Group, which also owns the Five Guys burger joint at Plaza Singapore, made a pre-tax loss of HK$79.6 million for the seven months to July 31 and had an unaudited consolidated net asset value of about HK$72.6 million at the same date, The Straits Times reported.
Genting Hong Kong owns the Star, Dream and Crystal Cruises brands, operates shipyards and has a stake in Resorts World Manila.
It made a net loss of US$742.6 million in the first half of the year, due in large part to port closures that have forced cruise lines worldwide to suspend sailings from as early as February, the report added.
Revenue for the six months was US$226.2 million, down from US$729.2 million in the same period last year. The Hong Kong-listed firm owed US$3.4 billion as at July 31, according to the report.
The company said it had started implementing measures — including cost-cutting and deferring of loans — so as to have a “reasonable prospect” of meeting its financial obligations until June next year.
It said it had received interest for investment in one of its cruise brands.
Malaysian conglomerate Genting’s hospitality and gaming empire has been badly affected by pandemic-related restrictions, which have forced the temporary closure of casinos and put a pause on tourism worldwide, the Straits Times added.
Source : FMT