Creditors intend to seize SunCity over alleged Alvin Chau default

| By Daniel O'Boyle
Creditors have announced that they plan to seize Alvin Chau’s assets, possibly including junket operator SunCity, after alleging that he defaulted on a HK$300m (£29.0m/€34.0m/US$38.5m) loan when he was arrested last month.

Last week, SunCity warned of a possible “change in control”, after creditors claimed that Chau defaulted on a HK$300m loan when he was arrested last month.

Chau was one of 11 people held by Macau police for allegedly creating an illegal live betting platform in the Philippines, which attracted customers from mainland China via a Macau-based junket.

Following the arrest, Chau announced he would step down as SunCity and Summit Ascent chairman, but he is still the controlling shareholder of the SunCity Group.

Following this event, Wooco Secretarial Services, which had lent Chau’s Star Soul Investments business HK$300m on 30 July, served a “demand letter” to Star Soul.

This letter demanded full repayment of the loan, plus interest, for a total of HK$313.6m, arguing that the arrest could be considered a default.

SunCity was informed of the letter on 8 December and noted that it could lead to the junket operator changing hands, as the creditors could go after Chau’s assets if he cannot pay.

Today, SunCity was informed that Star Soul received a new letter, in which Wooco stated that it has “no alternative but to enforce the securities under the security documents including, without limitation, selling, realising, transferring or otherwise disposing of all or any part of them without further notice”.

These securities, SunCity noted, include Chau’s 74.9% stake in the junket business.

However, SunCity also noted that there was currently no information about how Wooco would seek to enforce this.

Summit Ascent, a SunCity subsidiary that operates the Tigre de Cristal resort in Vladivostok, Russia, also issued an identical notice.

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