Suncity Group flags US$30 million Hoiana loan default, issues profit warning on substantial losses

March 24, 2022 Vietnam Earnings & Filings

Hong Kong-listed integrated resort investor Suncity Group said Wednesday that the operating entity of its integrated resort Hoiana, located near Hoi An in Vietnam, is in default after failing to repay any of a US$30 million loan provided by Suncity in 2020.

According to details contained in a profit warning filed with the Hong Kong stock exchange, Gold Yield Enterprises Limited (GYE) – jointly owned by Suncity subsidiary Star Admiral and an external entity called Alpha Era – had failed to repay US$34.9 million comprising the loan and accrued interest by its due date of 28 February 2022, with the amount becoming instantly payable.

An identical amount is owed by GYE to Alpha Era.

Suncity said it will “closely monitor the subsequent development and the status of the loan and the loan by Alpha Era owed by GYE,” although it did not outline any action to be taken.

The company had stated at the time that the funds were to be used by GYE for the ongoing development of Hoiana, which held an exclusive preview opening of its first phase on 28 June 2020. GYE owns 66.6% of Hoiana’s developer, Hoi An South Development Ltd (HASD). The launch and subsequent ramping up of the integrated resort’s operations have been heavily impacted by the COVID-19 pandemic.

Suncity, which also holds controlling interests in Russian integrated resort Tigre de Cristal and an ongoing IR development in Manila’s Entertainment City precinct, also revealed Thursday that it expects to record a loss of at least HK$526.5 million for FY21, having recorded a profit of HK$795.7 million in 2020. The loss is due to decreases in the fair value of financial instruments and convertible bonds, impairment loss on loans and an “increase in share of loss of a joint venture of approximately HK$160.5 million.”