Receivers controlling the Goldin Financial Global Centre (GFGC) in Hong Kong on Monday struck back at a Friday statement by Goldin Financial Holdings suggesting that it would continue to market the 28-storey tower.
Corporate restructuring firm Borrelli Walsh, which is acting as receiver for Goldin Financial’s creditors after the Hong Kong-listed firm defaulted $494.5 million in debt related to the property, said, “The Receivers wish to clarify that they and Knight Frank are the only authorised representatives able to conduct any marketing or sale of Smart Edge or GFGC and that they are the only parties involved in the sale process.”
Following a court decision on Thursday, Goldin announced late Friday that it now recognised Borelli Walsh’s officers as the only controllers for Smart Edge Ltd, the company holding the Goldin Financial Global Centre. However, in the same exchange notice, Goldin indicated that it would continue to try marketing the asset to potential buyers.
Borrelli Walsh’s statement pushed back against language in Goldin’s Friday announcement that gave the impression that the defaulting company remains involved in the sale process for Smart Edge, and the GFGC. The company, and the tower, which is its sole meaningful asset, were seized in July after Goldin defaulted on the mezzanine financing package arranged by an affiliate of Deutsche Bank.
Borrelli Walsh also refuted on Goldin’s attempt to muddy the ownership waters, emphasising that Goldin Financial had not opposed Borrelli Walsh’s application to Hong Kong’s High Court to confirm Borrelli Walsh’s Cosimo Borrelli, Simon Ma and Jocelyn Chi as the only duly appointed directors of Smart Edge and GFGC.
Borrelli Walsh’s Monday comments seem pointed at remarks in the Friday statement by Goldin, which is controlled by mainland tycoon Pan Sutong, that appeared to assert control over the property.
In the Friday note, Goldin said the court ruling would “have a positive impact on the transactions being contemplated by the Company in relation to the possible disposal of the entire issued share capital of Cheng Mei and Goal Eagle, which in turn holds the entire issued share capital of Smart Edge and the Office Property”, and that until then, Goldin would “continue to communicate with the SE Receivers and the SE New Directors with a view to facilitating completion of the Disposal”.
Aside from reiterating that the sale of Smart Edge and GFGC was within Borrelli Walsh’s rights, the receivers said Goldin was required to immediately grant them access to the property, deliver Smart Edge’s financial records in their entirety, inform Smart Edge’s bankers that Borrelli Walsh was in full control of its accounts, and notify the Hong Kong Registrar of Companies to withdraw any objections to the appointment of new directors.
Tender Sale Moves Forward Again
Borrelli Walsh took control of GFGC in July on behalf of Goldin Financial’s creditors and the tower was put up for sale in September in a tender process managed by property consultancy Knight Frank.
Despite the property being in receivership, Goldin in mid-October said it had secured a provisional agreement with little-known counterpart Tim Fong to sell the building for HK$14.3 billion ($1.8 billion). At the time, Goldin told investors that it was in the process of securing HK$8.7 billion in new credit, as well as selling Goldin’s first Kai Tak plot for just over HK$7 billion.
CK Asset, which had been arranging the HK$8.7 billion credit package, is now said to have abandoned that effort.
Steady March to Closure Continues
The exchange notice antics are the latest chapter in the soap opera of Pan’s financial woes, which started in mid-2019 when Goldin forfeited a HK$25 million deposit on a second, HK$11.1 billion Kai Tak commercial land site. Since then, the beleaguered developer has been mired in debt totalling at least HK$10 billion.
On top of the GFGC seizure last summer, Goldin was slapped with a lawsuit by mainland-based China Cinda Asset Management in June for RMB 1.5 billion ($220 million) after the company defaulted on financing for a Tianjin development. At the time, Goldin had HK$11.9 billion in liabilities, and the RMB 18 billion Goldin Metropolitan Central Business District and its 128-storey Goldin Finance 117 skyscraper in Tianjin remain unfinished.
On 1 November, Goldin announced that a Bermuda court had adjourned further hearings on DB Trustees (Hong Kong) petition to wind up Goldin until 23 November.
In a 2020 financial review, Goldin chalked up its dire performance to pressure on its core business stemming from Hong Kong’s social unrest and the COVID-19 pandemic.