Is Hong Kong’s ‘Superman’ the mystery buyer of cash-strapped Goldin’s Kai Tak waterfront residential site?
- Goldin strikes a deal to park its Kai Tak residential site with the help of mystery lifeline provider at a cost of HK$853 million
- Deal gives Goldin immediate cash to repay debt and renew its loan facility to alleviate a cash crunch and fend off creditors
Goldin Financial Holdings plans to sell its waterfront residential site in Kai Tak to a mystery buyer at a deep discount in exchange for cash and loan, in what is the first major debt restructuring to unfold from the city’s property market slump.
The deal was structured to give Goldin an option to buy back the property at a cost of HK$853 million within 12 months. Goldin paid HK$8.91 billion for the site in a government tender in November 2018, at the height of the market boom.
The deal comes as critical lifeline for Goldin to lighten its debt burden after a series of ill-timed debt-funded acquisitions. It will also help the group preserve some of its prime assets after hostile creditors earlier this month attempted to foreclose the company to recover their loans.
The sale is shrouded in mystery because not much is known of the buyer, sparking speculation that Hong Kong’s most-famous billionaire Li Ka-shing is behind the deal. The previous deal in May to sell the same parcel to closely-held Top Family Group has now been terminated, according to Friday’s exchange filing.
The transaction prices the Kai Tak land at a 26.3 per cent discount, or HK$890 million, to its adjusted value after accounting for the debt. Goldin also disclosed that the value of the site has depreciated to HK$7 billion after a reappraisal, as the property market slumped through a year-long anti-government protests and the ensuing recession.
“The overall business environment in Hong Kong is experiencing increasing challenges, causing uncertainties and pressure to the group’s property development and investment business,” Shirley Hui Wai Man, Goldin’s executive director, said in a statement. “The group will receive fresh capital in the amount of HK$2.5 billion from the disposal to enhance its financial flexibility to repay its other borrowings,” she said.
CK Asset may be eyeing a shortcut to replenish land bank with its role in Goldin restructuring, analysts say
Shares of Goldin Financial, which were suspended on July 17, rose as much as 49 per cent to HK$1.58 before ending at HK$1.2 for a 21 per cent gain.
“It is a good deal for the buyer who is guaranteed a profit of HK$853 million in a year if Goldin repurchases the site,” said Raymond Cheng, head of Hong Kong and China research at CGS-CIMB Securities
A source close to the deal said CK Asset helped arrange the deal, but did not elaborate further.
Market observers said that CK Asset, which does not have any land in Kai Tak, billed as Hong Kong’s upcoming second core business district, may have played a key role in the transaction. “CK’s entry into the company has given rise to a lot of speculation in the market. With the CK Asset brand, lenders at least will have confidence to lend to Goldin,” said Cheng.
Goldin had total liabilities of some HK$18.5 billion on December 31, including short-term liabilities of HK$11.8 billion of liabilities due within 12 months, according to its interim report. Its loan facility amounting to HK$3.5 billion is said to be coming due in October, sources said.
Billionaire chairman of indebted property firm Goldin, Hong Kong ‘shop king’ among investors disposing of assets on the cheap to pay debt
“A new loan facility is at an advanced stage of negotiations,” said the source, adding that Goldin still has cash reserves of HK$1 billion for working capital.
Last week, its headquarters building, Goldin Financial Global Centre, in Kowloon Bay, was at the risk of being taken over by creditors who demanded early repayment of debt.
