Distressed Chinese Developer Evergrande Selling HK Headquarters
HONG KONG – A source with direct knowledge of the matter revealed that Evergrande Group is disposing its headquarters in the Chinese territory through a tender process that closed on Thursday, reported Reuters on Thursday afternoon (28 July, SGT), citing.
The heavily indebted Chinese developer is selling the 26-storey China Evergrande Centre in Hong Kong’s Wan Chai district after a potential US$1.7 billion transaction fell apart in Q4 2021.
It’s divesting the commercial property in an effort to raise funds to help repay its debts of over US$300 billion. Sources said the sale proceeds from the Hong Kong office building would be tapped to repay foreign creditors, in line with a debt restructuring plan that is expected to be announced this week.
A source shared that several Hong Kong-based real estate developers have taken part in the tender, including CK Asset. Founded by billionaire Li Ka-shing, CK Asset confirmed via email on Thursday that it had submitted a bid for the Hong Kong commercial property.
On the other hand, there was little participation in the tender for the office building measuring 345,000 sq ft by Chinese government-owned companies.
The Financial Times reported on Thursday that Evergrande recently hired property consultancy Cushman & Wakefield (C&W) as the sole marketing agent to help the former unload the office tower. Citing a source, the news outlet said the disposal was expected to generate a much lower amount this time, closer to HK$9 billion (US$1.15 billion).
In October, Reuters reported that Chinese government-owned Yuexiu Property scrapped a proposed US$1.7 billion transaction to acquire the China Evergrande Center due to misgiving about the Evergrande Group’s terrible financial situation.
