BEIJING, September 13 (TMTPOST) – China Evergrande's (03333.HK) Hong Kong headquarters building, China Evergrande Center, has been taken over by a receiver appointed by China CITIC Bank International ("CBI"), a subsidiary of creditor CITIC Bank, after the struggling Chinese property developer defaulted on a loan and twice failed to sell the building.
The takeover of Evergrande Centre by the CBI is based on the loan financing from the CBI by Pioneer Time as chargor over the commercial building on 26 November 2020. According to a document of the Hong Kong Companies Registry dated December 4, 2020, the mortgage in question involved a sum of HK$7.6 billion ($988million) and the borrower was Tianji Holdings, a wholly-owned subsidiary of Evergrande.
According to Hong Kong Land Registry documents, the owner of Evergrande Center is still Pioneer Time, but the registration data involves a Deed of Appointment of the CBI filed on last Tuesday, 2022.
In August last year, Evergrande offered HK$15.6 billion ($2.03 billion) for the sale of the commercial building, seeking to ease liquidity pressure by selling assets. After that, Evergrande reduced the sale price to HK$10.5 billion ($1.37billion) to Yuexiu Property (00123. HK), but the two sides ultimately failed to strike a deal.
According to data from a senior source in Hong Kong's commercial office market, the market price of Evergrande Center at that time was estimated to be between HK$12.4 billion ($1.61billion) and HK$13.2 billion ($1.72billion).
Evergrande bid for the sale of Hong Kong Evergrande Center again at the end of July this year, and the flagship property of the Li Ka-Shing family, the Cheung Kong Group (01113.HK) entered the bid to participate. At that time, Evergrande Center's valuation was further reduced to about HK$9 billion ($1.17billion), but the final transaction also failed to be implemented.
China Evergrande has been suspended from trading on the Hong Kong Stock Exchange since March 21, 2022, and has not resumed trading. The Company has not yet disclosed its full-year audited financial statements for 2021.