LET Group(1383), formerly known as Suncity Group, has issued a profit warning, expecting to record a loss of HKD 409 million in 2022, compared to a loss of HKD 528 million in 2021.
Meanwhile the group has issued an internal circular announcing that Star Image, an indirect wholly-owned subsidiary of the Group, had lent US $30,000,000 in principal to Gold Yield, a company owned by Star Image and Alpha Era Investments Limited in equal shares in July 2020 and March 2022, respectively. Star Image has already collected a partial repayment of approximately US $115 million (approximately HKD 895 million) from TOT, which implies that the relevant overdue shareholder’s loan and the interest accrued thereon have been settled upon repayment. The loan is related to the Group’s South Shore project in Hoi An, Vietnam.
The profit warning issued earlier is mainly based on the fact that the overall operation continued to be affected by the COVID-19 pandemic and related travel restrictions, and no revenue was generated from the travel related products and services business during the year.
According to LET Group, TOT is a company owned as to 50% by each of Star Image and Alpha Era Investments Limited. After the repayment, the outstanding balance of the shareholder’s loan owed by TOT to Star Will was approximately US $31,200,000 (approximately HKD 243,000,000), representing the outstanding balance of the equity loan to a joint venture which is interest-free, unsecured and has no fixed repayment terms.
Immediately prior to the Repayment, the Group provided a total of approximately US $129,000,000 (approximately HKD 1,006,000,000) in principal amount of shareholder’s loan to TOT Tech. The carrying value (net of impairment loss) of the Shareholder’s Loan and accrued interest as at the end of 2021 was approximately HKD 571,000,000, of which approximately HKD 387,000,000 and approximately HKD 167,000,000 were equity loans to joint ventures and approximately HKD 16,900,000 were due from joint ventures.
The Group expects to record a gain of approximately HKD 515,000,000 from the repayment, subject to audit.