Goldin’s HK$18.3B Kowloon HQ Put on the Market by Creditors

The drama around cash-strapped developer Goldin Financial Holdings reached a new high point today as a property agent began marketing the Hong Kong-listed company’s headquarters on behalf of unpaid creditors, according to a statement received by Mingtiandi.

Knight Frank announced today that it has been appointed by Cosimo Borelli and Simon Ma, directors of corporate restructuring firm Borrelli Walsh, to invite expressions of interest in the purchase of the Goldin Financial Global Centre, an 852,433 square foot (79,153 square metre) tower in Kowloon Bay.

“It is rare to see en-bloc buildings of this quality come to market, and we are expecting strong interest from both core investors and owner-occupiers,” Paul Hart, executive director and head of commercial for Knight Frank Greater China said in a statement.

The GFGC was first claimed by the directors of Borelli Walsh in July of this year on behalf of creditors seeking repayment of $494.5 million in debts, which had been guaranteed by the grade A commercial block. The expression of interest exercise is expected to close on 11 November.

Office Tower May Sell at 34% Off

Today’s announcement follows months of asset disposals by Goldin, which earlier this month confirmed that it was receiving a bailout from Li Ka-shing’s CK Asset. In a flyer promoting the GFGC, Knight Frank noted the high specifications of the 2016-vintage building.

“The uniquely designed facade makes the building an eye-catching commercial landmark in Kowloon East,” Knight Frank said, noting that the 28-storey, Kohn Pederson Fox designed structure has been awarded LEED Platinum certification for sustainability, as well as a provisional Gold rating under Hong Kong’s BEAM Plus green building criteria.

Despite that pedigree, with the Hong Kong market currently mired in one of its deepest slumps in recent decades, Goldin’s creditors are likely to be selling their confiscated prize at a significant discount.

Knight Frank estimates that the building will sell for over HK$12 billion, or around HK$14,000 per square foot of gross floor area. Should the property sell at that price, it would mark a 34 percent discount from the HK$18.3 billion at which Goldin had valued the property in December 2019, according to an announcement in July.

Bond Trustees Take Over

Borelli Walsh are understood to have been appointed to secure, and potentially to sell, the GFGC by the security trustee for HK$6.8 billion in senior notes issued by a subsidiary of the company in April of last year and secured by a trust deed on the office tower.

The relationship between the senior notes and Goldin’s corporate headquarters is substantiated by documents filed with Hong Kong’s Land Registry on 10 April last year with Deutsche Bank affiliate DB Trustees (Hong Kong) Ltd acting as trustee.

The sale process for Goldin’s prized headquarters comes despite the company previously having said that it was making progress in paying down its debts, which included an announcement early this month that it had reached a deal to sell its finance business for over HK$2 billion.

Just last Friday, however, the firm helmed by mainland billionaire Pan Sutong let loose with some fresh bad news, as it announced that it expected to suffer a loss of HK$6.1 billion for the fiscal year ending 30 June. That shortfall came after the firm had reported a HK$6.4 billion profit for 12 months ending 30 June 2019.

The company attributed the loss primarily to the write down in value for a Kai Tak development project, and a slide in the fair value of its investment properties of around HK$2.2 billion.

In July, when tenants at the GFGC first began reporting that they had received notices from Borrelli Walsh representatives to pay rent to them as appointed receivers, rather than to Goldin, the troubled firm had reassured the market that it had ample assets and fresh credit was on the way.

Asset Sell Off Continues

In April and May Pan Sutong had taken out second and third mortgages on his luxury villa in Hong Kong’s Deep Water Bay area in an apparent bid to raise money. Pan’s May mortgage 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.

While Goldin has yet to name the buyer of that Kowloon East plot, market sources have informed Mingtiandi that the project was picked up by Shenzhen’s Kaisa Group.

When creditors first moved to seize its headquarters in July, Goldin had reached an alliance with CK Asset, which included veteran CK director Gerald Ma joining the developer as vice chair that month. That move was related to Goldin receiving HK$8.7 billion in credit, with CK later identified as having helped to arrange that lifeline.

Goldin has yet to report its results for the year ending 30 June, however, at 31 December it had liabilities totalling HK$18.5 billion, according to its most recent interim report.