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The fundraising exercise comes days after Goldin’s creditors said it had no right to sell its headquarters in Kowloon Bay, pictured. Photo: Sam Tsang
Business

Cash-strapped developer Goldin to raise US$178 million through share sale for debt repayment, working capital

  • The company plans to sell 1.39 billion new shares at HK$1 each
  • Billionaire Pan Sutong’s shareholding will fall to 59.05 per cent from 70.86 per cent
Hong Kong property
Sandy Li
Sandy Li
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Cash-strapped Hong Kong property developer Goldin Financial Holdings plans to raise HK$1.38 billion (US$178 million) in net proceeds from a share sale to at least six investors, the company said in a filing to the local stock exchange on Sunday.

The company, which is controlled by billionaire Pan Sutong, plans to sell 1.39 billion new shares at HK$1 each, which represents a discount of 3.47 per cent on the average closing price of HK$1.036 over five trading days leading up to September 28, the last trading session before its placement agreement, it said.

“The net proceeds from the placing are intended to be used for repayment” of debt and general working capital, Pan said in a company statement. His shareholding in Goldin will fall to 59.05 per cent from 70.86 per cent currently with the completion of the share sale.

The fundraising exercise comes days after Goldin’s creditors said it had no right to sell its headquarters in Kowloon Bay. Its liabilities amounted to less than HK$18 billion in total as of June 30, according to its annual accounts, which were published recently. Its cash reserves, however, stood at HK$23 million, having dropped sharply from HK$2.4 billion as of December 31 last year.
The developer and its creditor are both currently claiming the ownership of the 28-storey Goldin Financial Global Centre in Kowloon Bay. On September 28, the receivers and managers of Goldin Financial Global Centre engaged Knight Frank as the sole agent to seek buyers for the grade A office building, which could fetch at least HK$12 billion. A few days later, on September 30, Goldin said in its annual results announcement that it had entered into a provisional sale-and-purchase agreement for the building with an independent third party for HK$14.3 billion the previous day.
Goldin Financial Global Centre in Kowloon Bay. Photo: Handout

On October 5, Cosimo Borrelli and Ma Siu Ming of specialist restructuring firm Borrelli Walsh, who have been appointed receivers and managers of Goldin Financial Global Centre by Goldin’s creditors, said the company had no right to sell it.

“None of Goldin Financial, [subsidiaries] Cheng Mei or Goal Eagle control [subsidiary] Smart Edge or the property … have any power or authority to sell Smart Edge or the property … the receivers are the only authorised representatives able to deal with the affairs of Smart Edge, including the property,” they said. Smart Edge directly owns Goldin Financial Global Centre and the land it is built upon.

Moreover, last Friday Goldin announced that Gerald Ma Lai-chee, an executive committee member at CK Asset, had resigned as vice-chairman and non-executive director. He was appointed to the position in July. Ma will, however, continue as senior adviser and will continue to provide financial and restructuring advice to Goldin.
This article appeared in the South China Morning Post print edition as: Goldin eyes placement to pay debt and boost capital
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