CIFI Looks to Sell Shanghai Headquarters, Warns of $2B Full-Year Loss

CIFI Holdings is shopping some of its most high-profile real estate assets in its Shanghai hometown, including its headquarters building held with joint venture partner Henderson Land, as the cash-strapped builder warns of a multibillion-dollar loss in its full-year financial results.

A source familiar with the sale efforts confirmed to Mingtiandi on Monday that CIFI has been marketing the Henderson CIFI Centre in the megacity’s Hongqiao district for “some time”.

In addition, Shanghai Henderson CIFI The Roof, a commercial complex near Xintiandi, has lined up a “pretty committed buyer” through property consultancy Colliers, the source indicated. Both potential disposals were first reported by the South China Morning Post last week.

The news comes as CIFI said Friday that it expected to report a full-year loss in the range of RMB 13 billion to RMB 14 billion ($1.9 billion to $2 billion) for 2022, a year that saw the builder controlled by billionaire chairman Lin Zhong suspend bond payments and launch a restructuring of its $6.85 billion offshore debt load.

Significant Progress Cited

The SCMP reported that CIFI is seeking RMB 880 million for its headquarters, which is in one of two towers at Henderson CIFI Centre, and RMB 550 million for the other tower. The centre comprises more than 25,000 square metres in total.

The Jean Nouvel-designed Shanghai Henderson CIFI The Roof, renowned for its large atrium and abundant wooden blinds, encompasses 15,000 square metres of commercial units and 25,000 square metres of office space.

In its business update and profit warning, CIFI said it had made significant progress in formulating “a holistic solution to its current offshore liquidity situation”. The plan may include an option for some or all creditors to voluntarily convert a proportion of their debt to equity or convertible bonds in the company.

“To further strengthen the group’s cash position, the group remains active in taking advantage of any improved market sentiment when it arises to explore disposal of non-core assets,” Lin said in the update filed with the Hong Kong stock exchange.

Working Through the Pile

Last November, CIFI suspended payments on all its offshore debt after failing to reach an agreement with creditors to which it owed $414 million all told.

In December, the developer completed a placing and subscription of shares to raise HK$946 million (now $120.7 million) after fees and expenses. The funds were used to pay HK$342 million to offshore lenders, a sufficient amount to cover all interest for the period to and including 31 December 2022.

The remaining funds have been or will be used for the benefit of the holders of CIFI’s bonds, the company said Friday.