China Oceanwide’s creditors seize control of stalled San Francisco skyscraper after developer’s US$334 million default

Offshore credit holders have taken over Oceanwide’s entire holdings in a stalled skyscraper development project in San Francisco

Two of Oceanwide’s notes, valued at a combined US$334 million, have matured

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An undated image of the construction site at the San Francisco Oceanwide Center. Photo: Facebook

Published: 2:57pm, 30 Oct 2021Updated: 2:57pm, 30 Oct 2021

China Oceanwide Holdings’ real estate troubles are mounting in the US, with credit holders taking control of a stalled skyscraper development in San Francisco.

Overseas credit holders of Oceanwide’s two offshore units have taken over their entire holdings in the project, the developer said in a Shenzhen Stock Exchange filing. The two notes, in dollars and worth a combined HK$2.6 billion (US$334 million), have matured.

While investors around the world are watching to see how the crisis around cash-strapped China Evergrande Group is resolved, Oceanwide has also run into trouble with real estate projects in New York, Los Angeles and Hawaii. All together, the company has spent roughly US$3.5 billion on US investments that are idle or nowhere near finished.

After a series of failed talks with potential partners, Oceanwide has been trying to extend its loans and free up cash amid mounting tumult. Now that the San Francisco project has been possessed by creditors, there could be added urgency for Oceanwide to extract whatever it can from its US projects.

“Someone’s going to come in and get it at a great price and be a happy camper,” said Nick Griffin, executive director of the Los Angeles Downtown Central Business Improvement District. “They won’t just take a haircut. It’ll be a crew cut.”

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