Advertisement
Hong Kong property
BusinessInvestor Relations

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

Reading Time:3 minutes
Why you can trust SCMP
An aerial view of Kai Tak, where residential buildings are undergoing construction. Photo: Martin Chan
Sandy Li
Cash-strapped Hong Kong developer Goldin Financial Holdings said it had found a new buyer for its waterfront residential plot in Kai Tak, less than two weeks after agreeing to sell the property to an offshore buyer. The change of mind comes with an immediate loss of HK$450 million (US$58 million).
Advertisement

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.

The about-turn suggests a scramble for some of Goldin’s prized land bank in the city as the developer controlled by billionaire chairman Pan Sutong seeks to fend off hostile creditors. The company’s distress is the first major trouble to unfold from the cracks in Hong Kong’s property market, stemming from the US-China trade war, social unrest and the coronavirus pandemic.
Goldin Financial Global Centre in Kowloon Bay, one of the group’s key assets worth at least HK$15 billion. Photo: Handout
Goldin Financial Global Centre in Kowloon Bay, one of the group’s key assets worth at least HK$15 billion. Photo: Handout
Advertisement

“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.”

Goldin is no stranger to self-inflicted damages arising from a series of U-turns related to its venture in Kai Tak redevelopment plan. The developer bought the land for HK$8.91 billion in a government tender in late 2018, and attempted to sell it to a private company in May for what would have been a record loss in local market history.
Advertisement