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China Builder Kaisa Puts Hong Kong Headquarters Up for Sale

The Center building in Hong Kong, China, on Wednesday, July 17, 2024. The Center’s owners contend with value drops and high vacancy, and distressed sales volume in Hong Kong is on track to exceed 2023 level. (Lam Yik/Bloomberg)

(Bloomberg) -- Chinese developer Kaisa Group Holdings Ltd. is seeking to sell its Hong Kong headquarters office, according to people familiar with the matter, marking the defaulter’s latest effort to ease funding pressure.

Kaisa has offered to sell the 30th floor of The Center, an office tower in the city’s financial district, the people said asking not to be identified discussing a private matter. The developer is seeking more than HK$500 million ($64.3 million) for the space, said one of the people. The builder pledged the premises to Kingston Finance Ltd. in 2023 to secure a loan, land records show. 

The planned sale is a reminder of Kaisa’s continued financing woes after it defaulted on its dollar debt in 2021 and as China’s unprecedented housing crisis approaches its fifth year. It also came after the developer said in September that it won creditor support for an offshore restructuring plan that lists the headquarters as one of four overseas assets that can be sold to raise cash.

Kaisa didn’t immediately respond to Bloomberg’s request for comment.

It’s not the first time that Kaisa has sought buyers for premises it owned in the iconic skyscraper, one of the high-profile buildings that symbolize China’s credit bubble bust, for debt repayment. It sold the 38th floor of the building in 2021 for no more than HK$186.4 million to Shandong Hi-Speed Holdings Group to settle part of an outstanding loan from the latter. 

With about $13 billion of offshore borrowings subject to restructuring, the developer now faces a Dec. 19 hearing at a Hong Kong court to seek permission to hold a creditor vote on its debt overhaul plan. The defaulter is under pressure to make progress after a petition to dissolve its business was filed last year. A hearing on the so-called winding-up request has been further adjourned to March 31.

Most of Kaisa’s offshore bonds were indicated at deeply distressed levels of around 5 cents on the dollar on Monday, according to the latest data compiled by Bloomberg.

--With assistance from Yuling Yang.

(Updates with details of the site and bond price)

©2024 Bloomberg L.P.