Goldin Financial Holdings is continuing its efforts to pay off past-due debts as the Hong Kong-listed company announced on Friday that it had reached a deal to dispose of a financing business for just over HK$2 billion ($260 million).
In announcing the sale of its factoring division, which offers debt finance services through offices in Hong Kong, Shanghai and the US, Goldin also confirmed earlier reports that Li Ka-shing controlled CK Asset Holdings had been the source of a HK$8.7 billion financial package in July that bailed out the firm after creditors had attempted to seize its Kowloon East headquarters over unpaid debts.
Goldin, which welcomed CK director Gerald Ma as its vice chair during July, has been struggling to pay off obligations in Hong Kong which in July totalled at least HK$10 billion as creditors continue to seek payment of overdue commitments on an unfinished 1.1 million square metre (11.8 million square foot) development in Tianjin.
Goldin Asset Sales Continue
The buyer for Goldin’s debt financing unit is Power Alpha Global Limited, a privately held local firm which has no apparent connection to CK Asset.
Goldin indicated that it had decided to part with the business, which it listed as one of the group’s four major divisions, after it suffered a net loss of approximately HK$9.19 million for the year ended 30 June.
The company added that, given current market conditions, the board had decided that management and financial resources could be best directed to strengthening Goldin’s other business units, which include property development and investment, winery and wine-related activities and financial investments.
In April and May Goldin’s billionaire chairman Pan Sutong had taken out second and third mortgages on his home in Hong Kong’s Deep Water Bay area, which is just a few doors away from Li Ka-shing’s family compound, in an apparent bid to raise money.
The second of those two home loans came as Goldin sold a residential plot on the one-time runway of Hong Kong’s former Kai Tak airport at a HK$2.6 billion loss. In June 2019 the conglomerate had forfeited a HK$25 million deposit in order to back out of a HK$11.1 purchase of a Kai Tak commercial site after offering a record price to secure the Kowloon East parcel.
Tianjin Mega-Project Drives Default
Goldin’s financial restructuring has continued following Ma’s appointment on 22 July with CK Asset saying at the time that “We will actively study Goldin’s financial and debt status.” The 24-year veteran of Li family enterprises was given a brief of providing financial and restructuring advice to Goldin after Pan Sutong had been forced to pledge more than half of this 70.86 percent stake in the company in an effort to raise cash.
In June, mainland bad asset bank China Cinda Asset Management had sued Goldin Properties, a mainland developer controlled by Pan, along with other entities controlled by the tycoon, over a RMB 1.5 billion default on financing for a development project in Tianjin.
A news report today indicates that the Tianjin case remains unresolved with total financing for the unfinished mixed-use complex estimated at HK$3.4 billion.