Macau Property Opportunities (MPO) has fallen to a new low after the Guernsey investment company declared itself in default for not repaying a £1.5m loan secured on its Penha Heights development that was due yesterday.
The Guernsey investment company, which last month cancelled a £1.7m fund raise due to a lack of shareholder support, said it was in active discussions with its lenders. It warned shareholders that if the lenders forced a fire sale of the two luxury units at depressed prices it would leave a shortfall that the fund was unlikely to make up “given its current working capital and liquidity position”.
It stated: “Due to the parent company guarantees under the Penha Heights banking facilities and cross-default provisions in the group’s financing documents, there is also a risk that the group could become obligated to dispose of its other outstanding properties on an expedited and/or depressed basis, and could lead to the need for restructuring, liquidation or insolvency proceedings and shareholders losing all or part of their investment.”
Shares in MPO dived 2.6p, or 34%, to 5p, valuing the company at just £3m. They stood at 42p in April.
Separately, the company has exchanged contracts for the sale of two more units at The Waterside development in the former Portuguese colony on the south coast of China. Following completion of recent sales at the development, the loan-to-value ratio has reduced below the 60% covenant limit for the property’s lending facility.
