A creditor has taken over two mansions on Hong Kong’s Peak once valued at a reported HK$1.5 billion ($192 million) in the latest seizure of assets linked to fallen mainland billionaire Xu Jiayin and his China Evergrande Group.
Land Registry documents lodged on Tuesday and seen by Mingtiandi showed that receivers appointed by Orix Asia Capital had applied to take control over the entities holding House 10C and House 10E on Black’s Link on the Peak, which have been held by private entities linked to Xu,
In November 2021 the entities controlled by Evergrande directors had been pledged to Japanese lending firm Orix Asia in return for a reported HK$821 million in loans. The pair of homes were said to be Xu’s last remaining holdings in the hilltop community after receivers appointed by China Construction Bank (CCB) Asia repossessed House B in the community from a separate Evergrande-linked entity one year ago. That home was put on the market in March at an asking price of HK$880 million with no sale reported to date.
Creditors have been seizing assets belonging to Xu and his company as Evergrande struggles to find a way out of an estimated $340 billion in debt. After first defaulting on offshore debt in late 2021, Evergrande now hopes to avoid liquidation as it prepares to present a revised plan for restructuring $35 billion in offshore liabilities before a Hong Kong court on 4 December, in what would be one of the largest debt restructurings in China’s history.
Records show that House 10C, a detached luxury home measuring around 5,400 square feet (502 square metres), is held by an entity named Giant Hill Ltd, while the adjacent home at House 10E is owned by Good Bond Ltd. Both companies are linked to Xu, based on regulatory filings seen previously by Mingtiandi.
With the application for change in control of the entities holding the properties now being processed, the receivers seizure of the properties is expected to be completed within a few days, according to an account by local news site HK01.
At the time that the two homes were pledged to Orix Asia in 2021, they were valued at HK$1.5 billion, according to the media account, as Xu used his personal holdings as collateral to shore up Evergrande’s crumbling finances.
Orix had not responded to inquiries from Mingtiandi by the time publication, while Evergrande had not yet released a statement on the matter.
During the third quarter of last year, China CITIC Bank International took over Evergrande’s Hong Kong headquarters in Wan Chai district and later marketed the office building for sale at HK$9 billion. No sale has yet been recorded for the 26-storey tower on Gloucester Road, which is now called YF Life Centre.
Beyond the seizure assets, Xu himself was reported to have been taken into custody by mainland authorities in September, and is said to be suspected of “illegal crimes.”
Debt Woes Deepen
As it fights a winding-up petition, Evergrande’s revised restructuring is said to be offering offshore creditors 30 percent equity stakes in each of the company’s two HKEX-listed subsidiaries in exchange for debt worth about $19 billion, according to Reuters.
The two subsidiaries involved are its property management division Evergrande Property Services Group and Evergrande New Energy Vehicle Group.
Xu’s loss of his Hong Kong properties is part of a wave of repossession of trophy assets once acquired by mainland billionaires who can no longer pay their debts.
In September, a fifth-floor unit at Opus Hong Kong on the Peak’s Stubbs Road previously owned by Cheung Kei Group chairman Chen Hongtian was reportedly sold by receivers for HK$420 million.
The luxury apartment was seized from Chen in March after the Shenzhen tycoon defaulted on a HK$500 million loan he took out from the Bank of Communications, based on local media reports.