While not every developer can own Hongkong Land’s blue-chip portfolio or boast of China Evergrande’s ability to defy financial gravity, Goldin Financial Holdings has gained distinction in its own right this year by becoming perhaps the region’s most unpredictable real estate firm.
Since announcing before the 1 October holiday that it had conditionally sold the corporate entities holding its Kowloon Bay headquarters for HK$14 billion ($1.8 billion), the Hong Kong-listed firm has spun around to declare to the bourse on Friday that it has never claimed to have sold the asset.
Then over the weekend, Goldin followed up with three more statements to the exchange, including unveiling a program to sell a 20 percent stake in the company for HK$1.4 billion, and the resignation of a director from Li Ka-shing’s CK Asset Holdings, which had recently provided HK$8.7 billion in funding for the defaulting developer.
On Monday, Goldin followed up with a bit of good news, indicating to the HKEX that it had successfully delayed a petition by its creditors to wind up the company.
Building Tender Moves Forward
The series of declarations add to the confusion around Goldin as its creditors move forward with a tender for the Goldin Financial Global Centre which includes interested bidders submitting expressions of interest in the prime 28-storey structure by 11 November.
In its Friday statement, Goldin followed up on a statement in its financial report filed with the exchange on 30 September, which had indicated that it had sold a pair of BVI-registered companies which hold Smart Edge Ltd, a private entity which controls the 852,433 square foot (79,153 square metre) Kowloon East tower. The reported sale price would put the transaction for the entities at well above the highest rates ever paid for an office building in its neighbourhood.
In its latest statement, the company controlled by mainland magnate Pan Sutong noted of its earlier report that,
“the Proposed Transaction contemplates the transfer of equity interest in Cheng Mei and Goal Eagle and not disposal of the equity interest of Smart Edge or the ownership of the Office Property;”
The company did not elaborate on what value a buyer would be pursuing in the special purpose vehicles apart from the property asset, and the purchaser has yet to be identified.
Hong Kong’s High Court had ruled on 25 September that three officers of corporate restructuring firm Borrelli Walsh are the only directors of Smart Edge. The firm had been appointed as receivers by Deutsche Bank affiliate DB Trustees (Hong Kong) Ltd after Goldin defaulted on HK$6.8 billion in debt used to refinance its development of the Kohn Pederson Fox-designed trophy.
In a letter dated 5 October, Borrelli Walsh director Cosimo Borrelli declared that Goldin’s 30 September announcement, “constitutes a clear breach of the obligations of Goldin Financial under a guarantee provided by Goldin Financial in connection with the HK$6.8 billion Floating Senior Rate Secured Notes issued by Smart Edge.”
Borrelli went on to confirm that the tender for the Goldin Financial Global Centre was moving ahead as scheduled.
CK Director Leaves
The day after Goldin backed away from the reported sale of its office tower, the company also saw the departure of a Li Ka-shing-linked executive who had been seen as part of a bail-out program for the financially troubled firm.
Gerald Ma resigned from his roles as vice chairman and non-executive director of Goldin as of 9 October the company said, noting only that the long-time CK Asset director had no disagreement with the board and that there were no issues related to his departure that needed to be brought before the shareholders.
Ma, who has served with Li family companies for 24 years, had joined Goldin’s board in late July, just one day after the cash-strapped firm revealed that it was in the process of arranging HK$8.7 billion in fresh financing.
Last month, at the same time that Goldin sold a finance business for HK$2 billion, Pan had revealed that CK Asset, which had financed construction of the Goldin Financial Global Centre before the company refinanced through the Deutsche-backed bonds, had been the source of its July financing package.
Pan Moves to Sell Down Stake
On the same day that Ma left Goldin, the developer announced that it had agreed with Hong Kong-based placing agent Titan Financial Services Limited, to make available for purchase around 20 percent of its total share capital from the nearly 71 percent in equity held by Pan.
The share sale would raise HK$1.38 billon by selling 1.4 billion shares from Pan’s holdings at a price of HK$1.00 each, according to the exchange statement, with the proposed share price representing a 3.47 percent discount from the average closing rate of Goldin shares over the five days preceding the announcement.
Goldin said that the proceeds of the placement, which would reduce Pan’s stake in the company to 59.05 percent, would be used for working capital and to pay down debt.
In its most recent notice to the exchange, Goldin on Monday revealed that it had won a delay until 30 October on a petition by DB Trustees of Hong Kong, which had backed the Smart Edge notes guaranteed by the Goldin Financial Global Centre, to wind up Goldin Financial Holdings.
In the exchange declaration, Goldin said that due to its having only been notified by its Bermuda-based agent on 7 October of DB Trustees’ 7 August petition, that it had been able at a hearing of the petition held on 9 October, to have the session adjourned until 30 October.
In the same notice, Goldin indicated that it had on 8 October been notified of receivers being appointed for Cheng Mei Holdings Limited and Goal Eagle Limited, the two companies which had been contemplated in its 30 September sale announcement and which hold Smart Edge, and ultimately the Goldin Financial Global Centre.
Goldin said that is currently seeking legal advice on the effect of the receivership.