Struggling Chinese developer Evergrande Group (3333.HK) is selling its Hong Kong headquarters via a tendering process that ended on Thursday, a source with direct knowledge said, and local developer CK Asset (1113.HK) confirmed it has bid for it.
With more than $300 billion in liabilities, Evergrande has been trying to sell its 26-storey China Evergrande Centre in Hong Kong’s Wan Chai district after a potential $1.7 billion deal collapsed late last year, as part of the asset disposal effort to raise fund.
The sale proceeds of the Hong Kong tower would be used to repay offshore creditors as part of the debt restructuring plan that is expected to be announced this week, sources have said.
Several Hong Kong developers have submitted tenders, the source said, while there was little participation from Chinese state-owned players.
Evergrande recently appointed real estate services group Cushman & Wakefield as the sole agent to sell the 345,000 square foot office building, the Financial Times reported on Thursday, citing sources, and the sale was expected to fetch a much lower figure this time, closer to HK$9 billion ($1.15 billion).
Cushman & Wakefield and Evergrande declined to comment.
CK Asset, founded by billionaire Li Ka-shing, said in an emailed statement on Thursday it has submitted a tender for China Evergrande Centre.
Citing sources, that Chinese state-owned Yuexiu Property (0123.HK) pulled out of a proposed $1.7 billion deal to buy China Evergrande Center over worries about the developer’s dire financial situation.