In the report, the board of directors of Macau Legend said there were not any major risks that would bring the future of the business into question.
“The directors are not aware of any material uncertainties relating to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern,” the board said.
However, the independent auditor report by Ernst & Young contradicted the directors’ remarks in part after listing the size of the current debt obligations the business faces.
“These conditions, together with other matters set out in note 2.1 to the consolidated financial statements, indicate the existence of material uncertainties that may cast significant doubt on the group’s ability to continue as a going concern,” the auditors said.
They note that the continuance of the company would rest on the creditors agreeing to amend the loan terms or otherwise agree to an extension of the current waiver on the loan covenants.
Macau Legends has been struck by a succession of crises, notably in January of this year when Chan Weng Lin, the company’s former chief executive officer, was arrested and accused of running a “Triad organisation”.
The report also spoke of large losses, even during a period when Macau was not under lockdown. While adjusted EBITDA for the year was a loss of HK$300.3 million, as compared to loss of approximately HK$429.3 million last year – this was during a period without lockdowns in Macau.
With casinos in the special administrative region set to be closed for the foreseeable future, losses are almost certain to increase.