Li Ka-shing's CK Asset makes first step in rescue of distressed Hong Kong developer Goldin as hostile creditors seize assets

By Sandy Li sandy.li@scmp.com / https://www.scmp.com/business/article/3094317/li-ka-shings-ck-asset-makes-first-step-rescue-distressed-hong-kong?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3094317 | July 29, 2020 5:01 PM SGT
Hong Kong's most-famous billionaire Li Ka-shing has sent a top lieutenant to help rescue a cash-strapped developer in the first major blow-up and restructuring to unfold from the city's property market slump.
Goldin Financial Holdings, the troubled developer with HK$18.5 billion of liabilities, named Gerald Ma Lai-chee as vice-chairman and non executive director, according to an exchange filing late Wednesday. The 52-year-old executive, an executive committee member at CK Asset, "will focus on providing financial and restructuring advice" to the group, Goldin added.
"We will actively study Goldin's financial and debt status," CK Asset said in a separate email statement to the press, in response to queries about its role as a white knight to Goldin.
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Helmed by billionaire Pan Sutong and a neighbour of Li's, Goldin is embroiled in a legal fight with hostile creditors while it attempts to recapitalise itself and quicken asset sales. Pan himself has remortgaged his personal properties to repay debt, according to Land Registry records.
Gerald Ma Lai-chee, vice-chairman and independent non-executive director. Photo: Handout
Ma's appointment came a week after hostile creditors filed notices to wind up Goldin and seize control of the group's assets pledged as security for debt related to two loans worth the equivalent of HK$3.5 billion in March 2019 and a HK$6.8 billion floating-rate bond in the following month.
The assets in peril include Goldin's 27-storey headquarters in Kowloon Bay known as Goldin Financial Global Centre with a market value of at least HK$15 billion, according to its stock exchange filing on July 15. Others include equity stakes in its unlisted subsidiaries, it said.
Goldin has filed legal actions in the High Court of Hong Kong to challenge the creditors and nullify the appointments of "purported receivers". The group has been working to raise HK$8.7 billion of fresh capital, while arguing that the value of its headquarters alone offers a comfortable margin over its indebtedness.
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Goldin Financial Global Centre at 17 Kai Cheung Road in Kowloon Bay. Photo: Website
"We are open to discussing any kind of cooperation in refinancing depending on the terms and conditions," Goldin said in a reply to the Post, saying it is banking on Ma's experience to tackle its problems and details of its refinancing plan will be announce in due course. Goldin has fully repaid in 2019 an unspecified amount of loan from CK Group, confirming past financial support from Li's flagship.
The distressed developer had HK$18.5 billion in total liabilities on December 31, according to its interim accounts published in March, while its cash stood at HK$2.38 billion. Its principal bankers are Industrial and Commercial Bank of China, Industrial Bank, Shanghai Commercial Bank and HSBC.
Li, Hong Kong's second richest man who is nicknamed Superman for his business acumen, controls the CK conglomerate of property, telecoms, retail and port businesses spanning some 50 countries. He stepped down in 2018 to become a senior adviser to the group.
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It is not clear how far CK Asset will look into the Goldin situation beyond the stated advisory role. Getting on board, however, could give CK Asset an insight into its books, and possibly cherry-pick some assets at distressed prices to immediately alleviate the liquidity crunch.
Apart from the Kowloon Bay headquarters, Goldin's other notable investments include a waterfront residential plot at the former airport runway in Kai Tak. It was acquired for HK$8.91 billion in late 2018. Local media reports in the past had speculated CK Asset as the probable party behind a mystery offer to buy the Kai Tak land parcel.
That offer on May 10 from little-known Top Family Group, was to be completed within 30 days but has since been delayed. Goldin was supposed to despatch a circular to shareholders on the sale no later than July 24. There has been no update until the appointment of Ma from CK Asset on Wednesady.
Goldin has slumped 59 per cent in Hong Kong over the past 12 months, reducing it to a penny stock. Its market value has shrunk to HK$6.92 billion from as high as HK$128 billion in December 2015. Pan controls 70.8 per cent of the company.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
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