Chinese developer Logan’s US$8 billion restructuring hinges on Hong Kong luxury tower loan

Chinese developer Logan Group is entering a crucial stage in its US$8 billion offshore restructuring, with just three months to pay or refinance a loan or risk losing control of a key luxury home project.

Holders of private debt issued by Logan – which has more than 150 projects across Chinese cities – have grown particularly concerned about this risk and expressed that to the firm, people familiar with the matter said. They have not even received any so-called restructuring support agreement from Logan, meaning they do not have finalised terms to assess, according to two of the people.

The clock is ticking. The loan in question is a HK$10.2 billion (US$1.3 billion) syndicated facility that matures in August backing The Corniche development on the south side of Hong Kong. Logan has engaged JPMorgan Chase to arrange a refinancing, but a deal has yet to be finalised, according to people familiar with the matter.

The case underscores the challenges of China’s real estate restructurings, even as recent policy steps to support the industry lift some borrowers out of distress. Valuable assets offshore are scarce, and stakeholders are in an increasingly fierce fight to grab their own share. Even for a largely settled plan like Logan’s which took almost two years to negotiate, a small moving piece risks affecting the whole deal.

Media representatives for Logan and JPMorgan declined to comment.

The project, co-developed by Logan and KWG Group Holdings, has been at the centre of Logan’s restructuring because of its potential to generate cash. Logan said in January that it planned to use revenue from sales of flats in The Corniche to help pay back creditors. But amid competition in Hong Kong’s property market, prices of some units have been reduced by more than 40 per cent from original asking prices.