Hong Kong distressed developer loses US$58 million in 12 days in U-turn on Kai Tak land deal amid scramble with hostile creditors
- Cash-strapped Goldin finds new buyer for former Kai Tak airport runway site that comes with loan to fend off hostile creditors
- Developer cancels a July 17 deal with little-known offshore buyer for the same plot for an expected HK$450 million loss
Chen Zhuang Rong, a mainland businessman, is the new buyer of the site, Goldin said in a filing to the Hong Kong Stock Exchange late on Thursday evening. According to Tianyancha, a Chinese company information search platform, Chen owns stakes in eight Chinese companies, none of which is listed.
Goldin signed an agreement on Monday to sell the asset known as Kai Tak Area 4B Site 4 in Kowloon for HK$3.477 billion to yet another little-known entity called Yan You, it said in a Hong Kong stock exchange filing on Wednesday. The new deal comes with a profit-sharing plan for residential units and parking spaces in the former airport runway site, it added.
“We have different interested parties who were willing to give better offers than the one we announced a week ago,” a person close to the deal said, declining to be identified. “It allows the group to fetch a higher price with the profit-sharing plan.”
The latest deal unveiled on Wednesday values the Kai Tak land at a 2.6 per cent premium over its net adjusted value, versus a 23.6 per cent discount under the previous agreement, according to the filing. It will offer Goldin a 30 per cent share of excess profits from the sale of residential units priced at HK$29,000 per square foot, and 30 per cent of the revenue from car parking spaces.
“Land in Kai Tak has been sought after among developers,” said Kenny Tang, chief executive of Royston Securities. “Goldin has been forced to sell the site at a bargain because of its financial problem. The site will attract different cash-rich suitors.”
In a separate announcement on Wednesday, Goldin also said undisclosed creditors stepped up their pursuit on July 24 by seeking court approval to gain access to some of the company’s accounts and keys to its premises, after appointing their own receivers over the units that owed the creditors.
The creditors issued letters of demand earlier this month, seeking the immediate repayment of loans amounting to about HK$1.542 billion and US$250.7 million.