Hong Kong billionaire Li Ka-shing’s real estate arm has expressed interest in buying a majority stake in a syndicated loan backing a local luxury apartment building developed by two Chinese firms, according to people familiar with the matter.
(Bloomberg) — Hong Kong billionaire Li Ka-shing’s real estate arm has expressed interest in buying a majority stake in a syndicated loan backing a local luxury apartment building developed by two Chinese firms, according to people familiar with the matter.
CK Asset Holdings Ltd. has been in talks with existing lenders to take over most of the HK$10.2 billion ($1.3 billion) project loan for The Corniche, a residential building in Hong Kong’s Ap Lei Chau built by Logan Group Co. and KWG Group Holdings Ltd., said the people who requested anonymity discussing private matters. The Hong Kong developer has indicated it would make the acquisition in cash, said one of the people.
Representatives for CK Asset, Logan and KWG didn’t immediately respond to emailed requests for comment.
The development underscores the financial stress faced by Logan and KWG, after banks demanded repayment for the loan after the two developers defaulted on dollar bonds. The luxury project, which was supposed to generate HK$30 billion in sales, is seen as key to the two developers’ potential debt restructuring as an unprecedented industry-wide cash crunch in China persists.
Logan and KWG signed the three-year syndicated loan in 2021, according to data compiled by Bloomberg, with HSBC Holdings Plc, Standard Chartered Plc and Industrial and Commercial Bank of China (Asia) Ltd. among the lenders.
The banks held a meeting about the potential loan purchase by CK Asset on June 12, but no consensus was reached about the sale at the time, according to one of the people. Some banks have since been engaged in separate discussions with CK Asset about the deal, the person added.
Debtwire first reported the development.
Out of the 295 units being marketed at The Corniche, only three have been sold as of June 26, according to Centaline Property Agency Ltd.
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