The leadership of Suncity Group will take decisive actions to guarantee the ongoing operation of its enterprise.
The leadership of the struggling resort operator will implement stringent cash management and cost-reduction strategies to secure the survival of the business.
The leadership of Suncity Group will take decisive actions.
The gambling intermediary faced turmoil at the end of 2021 and the beginning of 2022 after the group’s head, Alvin Chau, was detained in November. Following the incident, Suncity Group stopped its gambling brokerage operations.
Alvin Chau has stepped down from his position at Suncity Group, and he has been accused of running illegal online gambling platforms.
Following Chau’s detention, Suncity Group also became the target of loan default claims, as an unnamed lender argued that Chau had violated a HK$313.6 million (about $39 million) debt. As a result, Suncity Group cautioned that the business could be taken over by creditors.
In March, the company stated that Kingly Enterprises failed to reimburse a $30 million loan to Suncity Group. Kingly Enterprises is a joint venture between Suncity Group’s subsidiary, Starfleet, and Alpha Era, an investment trust linked to the Hoiana resort in Vietnam.
A week later, Suncity Group warned that “there is a significant uncertainty regarding the Group’s ability to continue as an ongoing concern” as it reported a net loss of HK$646.2 million (about $82.6 million) for 2021.
The firms earnings have been in a downward trend for the past two years due to travel limitations in primary markets and the ensuing stagnation of the VIP lounge enterprise, ultimately leading to this deficit.
The company now states it will make every effort to stay solvent.
“The Board has directed the Company to combine all resources in order to endure,” stated the Melco Resorts Board of Directors. “Tight cash flow control is the Group’s top priority. The Group is presently implementing the most rigorous cost-reduction plan in its history. Non-essential businesses have been and will continue to be sold, such as the sale of mainland China real estate and aircraft in 2021.
“Management has also transformed the City of Dreams into a temporary isolation hotel; actively decreasing operating expenses while making every effort to avoid disrupting the experience for City of Dreams patrons as a world-class integrated resort.
“In Japan, the Group may consider selling hotel development land in Niseko and Miyakojima.”
The company’s Summit Ascent subsidiary operates the “Crystal Tiger” resort in Vladivostok, Russia. The board stated the business is performing well. However, the company has delayed plans to expand the resort due to Russia’s invasion of Ukraine in February.
“In Russia, the local mass market and slot machine business have enabled Crystal Tiger to become self-sufficient and generate positive EBITDA,” the board said.
The organization’s capacity to generate revenue, conserve funds, and sustain operations will contribute to its continued viability and functionality.
The board also declared that, given the scrutiny surrounding Macau’s intermediary model, they will endeavor to transform into a comprehensive resort enterprise.
“With Macau essentially withdrawing from the high-stakes gambling market, there are limited high-end gambling destinations in Asia to cater to this expanding demand,” they stated. “As the group continues its evolution into a pan-Asian resort corporation, they will target all conventional gambling segments, including high rollers, premium mass, general clientele, slot machines, and non-gambling amenities.”
“Furthermore, the board will prioritize allocating resources to ventures that yield the highest profitability and minimal risk.”
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