Troubled Chinese real estate developer Evergrande has found a potential buyer for its Hong Kong headquarters, it said on Thursday, days ahead of an expected announcement of the company’s long-awaited restructuring plans.
CK Asset Holdings, founded by Hong Kong billionaire Li Ka-shing, announced it has submitted a bid for the 26-story building, which Hong Kong media says is currently valued at HK$9 billion (US$1.1 billion). dollars) has.
Evergrande has been involved in restructuring negotiations after amassing $300 billion in debt, while Beijing continues its sweeping crackdown on excessive debt and rampant consumer speculation in the real estate sector.
The group previously said it was on track to present a preliminary restructuring plan by the end of July.
When the company acquired the headquarters for $1.61 billion in 2015, the deal set a record for the largest single transaction for an office building in Hong Kong, as well as price per square foot, according to the South China Morning Post.
Last October, the building was offered to state-owned Chinese developer Yuexiu for $1.7 billion, but the buyer backed out over concerns about Evergrande’s unresolved debt.
Evergrande, once a leading light in China’s real estate sector, has scrambled to divest assets in recent months, with chairman Hui Ka Yan using his personal wealth to pay off some of its debt.
In another sign of the turmoil, Evergrande ousted its CEO and CFO last week following an internal probe into why banks had seized over $2 billion from the company’s real estate services arm.
Evergrande’s troubles have impacted the entire Chinese real estate sector, with some smaller companies also defaulting on loans and others struggling to raise enough cash.
China’s real estate companies, long heavily dependent on credit to fund their massive developments, are struggling as a push by Beijing to control debt has slashed cash flows.
Analysts have said the shock would be felt well beyond its borders if the housing crisis spreads to China’s financial system.
But on Thursday, Hong Kong Finance Minister Paul Chan said the difficulties faced by Chinese developers would have a “very limited” impact on the financial hub’s banking stability.
“We have been monitoring this situation very closely and see no cause for concern,” Chan said.
Evergrande did not immediately respond to AFP’s request for comment.
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