Emperor International Shares Dive as Hong Kong Builder Reveals $2.1B in Overdue Loans

Shares of Emperor International, the Hong Kong-listed development subsidiary of Emperor Group, tumbled 11.8 percent Monday after the company’s annual results showed overdue loans totalling HK$16.6 billion ($2.1 billion).

Emperor International made the disclosure in a filing late Friday as it reported an attributable loss of more than HK$4.7 billion, widening from a year-earlier deficit of HK$2 billion, with the builder citing fair value losses on investment properties as a key factor.

The HK$16.6 billion in arrears includes bank borrowings for which Emperor International has breached certain terms of the loan agreements, according to the filing.

“The banks may request immediate repayment of these bank borrowings,” said the developer controlled by Emperor Group founder and chairman Albert Yeung. “Accordingly, these bank borrowings have been classified as current liabilities as at 31 March 2025.”

Debt Crunch Deepens

Emperor International had signalled a desire to reduce leverage last July when it agreed to sell a portfolio of retail, residential and industrial properties across Hong Kong to group boss Yeung.

The HK$1.15 billion disposal of the portfolio, comprising a number of retail and residential units in Causeway Bay, Tsim Sha Tsui and Kennedy Town and a pair of adjacent industrial buildings in the Tuen Mun area, came after Emperor International recorded its fifth consecutive year of losses driven by property markdowns.

Despite now having booked a sixth year of red ink, the company looks to be proceeding with plans to build 62 new homes in Hong Kong Island’s Sai Ying Pun neighbourhood after consolidating the project site this year.

In April, Emperor International agreed to acquire the space it did not yet own in 70-76 Queen’s Road West through an auction by compulsory sale. The builder plans to merge the acquisition with an adjacent site it clinched in 2021 to develop a project of up to 49,000 square feet (4,552 square metres) of gross floor area near Hollywood Road Park west of Central.

In Talks With Banks

Emperor’s surprise disclosure came just as market watchers were exhaling after Hong Kong heavyweight New World Development reportedly secured written commitments from all its banks for a HK$87.5 billion ($11.1 billion) loan refinancing.

On Friday, Emperor International said it was negotiating a financial restructuring plan with its banks while aiming to cut costs and boost liquidity and operating cash flows over the next 12 months through property sales and investment property rentals.

“Should the group fail to achieve the above-mentioned plans and measures, it might not be able to continue to operate as a going concern, and adjustments might have to be made to write down the carrying values of the group’s assets to their recoverable amounts, to reclassify its non-current liabilities as current liabilities with consideration of the contractual terms or to make provision for any contractual commitments that may have become onerous, where appropriate,” the company said.

Emperor International owns a portfolio of 11 investment properties spread across Beijing and London, in addition to its home city. In November, sister company Emperor Entertainment Hotel, the group’s HKEX-listed hospitality arm, agreed to sell a 57-unit serviced apartment block in Hong Kong’s Kennedy Town area for a property value of HK$275 million after the price fell by nearly half in two years.