Evergrande, in debt, seeks to sell its headquarters in Hong Kong – Business & Finance

HONG KONG: Struggling Chinese property developer Evergrande has found a potential buyer for its Hong Kong headquarters, reported Thursday days before the expected announcement of the company’s long-awaited restructuring plans.

CK Asset Holdings, founded by Hong Kong billionaire Li Ka-shing, said it has submitted a tender for the 26-storey building, which is currently valued at HK$9 billion ($1.1 billion). dollars) according to Hong Kong media.

Evergrande has been embroiled in restructuring talks after racking up $300 billion in debt, as Beijing continues its sweeping crackdown on excessive indebtedness and rampant consumer speculation in the property sector.

The group had previously said it was on track to deliver a preliminary restructuring plan by the end of July.

In 2015, when it acquired the headquarters for $1.61 billion, the deal set a record for the largest transaction for an office building in Hong Kong, as well as the price per square foot, according to the South China Morning Post.

Last October, the building was offered to Chinese state developer Yuexiu for $1.7 billion, but the buyer pulled out due to concerns over Evergrande’s unresolved debt.

Once a leader in China’s property sector, Evergrande has struggled in recent months to shed its assets as Chairman Hui Ka Yan has paid off some of its debts using his personal fortune.

In another sign of turmoil, Evergrande last week ousted its CEO and chief financial officer after an internal probe into why banks seized more than $2 billion from the company’s property services arm.

Evergrande’s woes have reverberated across China’s real estate sector, with some smaller companies also defaulting on payments and others struggling to find enough cash.

Chinese property companies, long heavily dependent on loans to finance massive developments, have found themselves struggling as Beijing’s efforts to reign in debt have reduced cash flow.

Analysts have said that if the real estate crisis spills over to China’s financial system, the shock will be felt far beyond its borders.

But on Thursday, Hong Kong Finance Secretary Paul Chan said the difficulties of Chinese developers would have a “very limited” impact on the financial hub’s banking stability.

“We are monitoring this situation very closely and find no reason for alarm,” Chan said. Evergrande did not immediately respond to AFP’s request for comment.

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