Guangzhou R&F Properties on Monday was served with a winding-up petition in Hong Kong’s High Court by a creditor linked to Singapore’s Temasek Holdings, with the legal motion coming despite a recent series of restructuring deals agreed with the Chinese developer’s bondholders.
SeaTown Private Credit Master Fund filed the petition against R&F subsidiary Trillion Glory in relation to the non-repayment of the fund’s share of an outstanding loan with $613.66 million in principal and accrued interest, the developer said Tuesday in a filing with the Hong Kong stock exchange.
“The board of directors of the company is of the view that the petition does not represent the interests of other stakeholders of the subsidiary and the company,” R&F said. “The petitioner is only one of the lenders of the loan holding only 18 percent of the outstanding principal amount of the loan.”
The petition is scheduled to be heard before the High Court on 25 September. The fund’s manager, SeaTown International, is owned by Seviora, an asset management unit of Singaporean state investor Temasek.
Collateralised Loan
The outstanding loan is collateralised by, among others, a pledge over the entire equity interest of an R&F subsidiary that indirectly holds 68 hotels and an office building in China, according to the developer led by chairman and co-founder Li Sze Lim.
A secured creditor may exercise its right to enforce the collateral instead of petitioning for winding-up, R&F said, adding that any wind-up attempt would be value-destructive and would diminish recoveries for creditors.
R&F has been “proactively communicating” with the SeaTown fund and seeking legal advice as to the appropriate course of action in response to the petition, it said.
“Based on the information currently available, the company does not believe that the petition would have any meaningful impact on the business operations of the group,” R&F said.
In April, R&F averted default on an £800 million project loan for its One Nine Elms development in southwest London, signing a deal to sell the $1.3 billion condo and hotel project to Chinese tycoon Cheung Chung-kiu of CC Land after winning consent from bondholders to restructure an existing financing deal linked to the asset.
The restructuring followed a July 2022 deal in which bondholders agreed to give the company more time to pay off its obligations.
In May, R&F agreed to sell its Vauxhall Square site in southwest London to an investor backed by Middle Eastern money, Bisnow reported. R&F had previously agreed to sell Vauxhall Square to Hong Kong’s Far East Consortium in March 2022, only to buy it back in September. In October of that year the developer announced that it would sell the project to Flow Capital, an investment firm backed by New World scion Adrian Cheng.
Courting Trouble
Guangzhou R&F is the latest Chinese developer compelled to answer a wind-up petition during a year that kicked off with the court-ordered liquidation of property giant China Evergrande.
Most recently, Sino-Ocean Group last month received a winding-up petition filed by Bank of New York Mellon relating to the Beijing-based builder’s failure to make payments on offshore bonds due in 2026 with a principal amount of $400 million.
Also in June, Hong Kong’s High Court gave Shenzhen-based Kaisa Group Holdings a seven-week reprieve to continue working on a debt restructuring plan in order to avoid liquidation.
Leave a Reply