The Goldin Financial Global Center will have a new owner soon
Mainland tycoon Pan Sutong has lost his battle for control of his Kowloon East headquarters, as Hong Kong’s High Court today ruled in favour of creditors which had seized the property in July.
The court confirmed that Smart Edge Ltd, a private company which holds the title to the 852,433 square foot (79,153 square metre) Goldin Financial Global Centre, remains under the control of receivers appointed by DB Trustees (Hong Kong) Ltd.
The Deutsche Bank affiliate had taken control of the 28-storey, Kohn Pederson Fox-designed structure after Pan’s firm, Hong Kong-listed Goldin Financial Holdings, had defaulted on HK$6.8 billion in mezzanine financing.
The judgement brings to an end Pan’s attempts to sell his headquarters to alternative buyers, with Goldin’s creditors already having started a tender process which is expected to bring in at least HK$12 billion ($1.55 billion) from the sale of the tower.
Tender Moving Forward
“Prior to this court hearing, there was already strong interest from prospective buyers from Greater China and abroad,” Knight Frank executive director and head of commercial for Greater China Paul Hart told Mingtiandi. “The ruling has cleared the air, confirming beyond doubt that the Receivers & Managers have the authority to sell the property and, Smart Edge, the company that holds the property.”
Goldin boss Pan Sutong seems a bit dazed by the court ruling
Knight Frank last month was appointed as sole agent for the sale of the property, which is certified as LEED Platinum on the US Green Building Council’s sustainability scale. Expressions of interest from prospective purchasers of the Goldin Financial Global Centre are due on 11 November.
“Goldin Financial Global Centre is by far the best quality office building available for sale in Hong Kong, and we are working closely with the Receivers & Managers to sell this impressive asset,” Knight Frank’s Hart added.
Should the property sell for HK$12 billion, it would be fetching around HK$14,000 per square foot of gross floor area. That price would represent a markdown of approximately 34 percent from the HK$18.5 billion valuation for the property as of 31 December, as included in Goldin’s most recent annual report.
Receivers Rejoice
In a statement today, corporate restructuring firm Borrelli Walsh, which has been appointed by DB Trustees as receivers for the assets pledged by Goldin in return for the past-due financing package, pointed out that the court ruling allowed them to get on with their jobs.
“The Receivers welcome the court’s ruling, which enables them to proceed to sell Smart Edge and/or GFGC without interference,” Borrelli Walsh said. Under the terms of the court judgement, the company’s officers, Cosimo Borrelli, Simon Ma Siu Ming and Jocelyn Chi are the only directors of Smart Edge.
As recently as 16 October, Goldin Financial was announcing that it had in place a provisional deal to sell its headquarters for HK$14.3 billion, to a buyer named as Fong Tim. However, it noted at the time that the purported transaction was subject to the court’s ruling today.
In addition to today’s judgement in Hong Kong, Goldin is facing a winding up petition on 30 October in Bermuda, where the company is domiciled.
The Hong Kong-listed company, which is estimated to be facing debts of $2 billion, has expressed confidence that it will defeat the petition, which seeks to put new directors in charge of resolving the company’s debts. The Bermuda court had originally met to hear the petition on 15 October, although Goldin succeeded in winning an adjournment until 30 October to gain additional time to prepare.
If CP1 (City Plaza One) is going to be sold for HK$15,000sfg (with passing rent on average at HK$40/sfg & close to full occupancy), then how much GFGC can fetch if the passing rent is around HK$30/sfg with an occupancy rate of 75-80% only???
That’s a good question. No doubt offers will be made for the GFGC, and we can only wait and guess at the price point.