The board of luxury hotel operator My Humble House Hospitality Management Consulting Co (寒舍餐旅) has approved a capital reduction plan to wipe out losses and issue special shares via private placements to strengthen its financial health.
The plan comes as the COVID-19 pandemic has cut the Taipei-based hospitality group’s revenue by about 50 percent over the past two years without a quick solution in sight.
The company last year reported a loss of NT$720 million (US$24.67 million), or a loss per share of NT$6.45.
Photo courtesy of ezTravel Co
It was the second consecutive annual loss as Le Meridien Taipei (台北寒舍艾美酒店) and Humble House Taipei (寒舍艾麗) in the city’s Xinyi District (信義), Sheraton Grand Taipei Hotel (台北喜來登大飯店) near Taipei Railway Station and hot spring resort Mu Jiaosi Hotel (礁溪寒沐) in Yilan County all suffered due to lingering border controls and disease prevention measures that weighed on guestroom operations as well as food and beverage sales, the company said.
Combined revenue in 2019 was NT$4.48 billion in 2019 prior to the pandemic, but that slumped to NT$2.8 billion in 2020 and NT$2.32 billion last year, company data showed.
The company’s board on Friday approved a plan to reduce its paid-in capital of NT$1.12 billion by 18 percent, or NT$200 million, to make up for cumulative losses.
The arrangement would allow May Humble House Hospitality to cancel 2 million common shares and bring its capital down to NT$915 million, it said.
The conglomerate would then issue up to NT$200 million of special shares via private placements to boost its capital, it added.
The program would help lower the company’s debt ratio and interest payments, while strengthening operating funds and earnings ability, it said.
My Humble House said it would price its special shares at no less than 80 percent of its reasonable value to safeguard the interests of its shareholders.
It opted for private placements after factoring in fundraising costs, efficiency and feasibility, it said, adding that potential participants are original major shareholders and affiliated companies.
The launch of a new Humble Boutique Hotel (寒居酒店) in Taipei demonstrated that the group is committed to its business and upbeat about the long-term market outlook, it added.
My Humble House shares yesterday closed down 1.34 percent at NT$22.10, a deeper fall than the TAIEX’s 0.62 percent retreat, Taiwan Stock Exchange data showed.
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