Tender Sale of Evergrande’s Hong Kong Headquarters Fails Again – Sources, by Reuters

By Clare Jim

HONG KONG – A tender for the sale of China Evergrande Group’s headquarters in Hong Kong has once again lapsed, according to two sources familiar with the situation. This decision came about because the offered prices and terms did not meet requirements.

Lenders of the office tower, known as China Evergrande Centre, had valued the asset between HK$8 billion and HK$9 billion. In September, they appointed a receiver to take control of the property and manage its sale, with a bidding deadline set for October 31.

Evergrande, which is burdened with liabilities exceeding $300 billion, is at the epicenter of a major crisis in China’s property sector. The company had been attempting to sell the 27-storey tower to generate cash before it was seized.

The tower was used as collateral for a loan of HK$7.6 billion from a group of lenders led by the Hong Kong branch of the state-owned China Citic Bank Corp Ltd.

One source close to Citic indicated that the lenders might consider putting the asset back on the market when conditions stabilize, unlike the volatile situation seen in the latter half of last year.

The sources chose to remain anonymous due to the confidential nature of the sale discussions.

There was no immediate comment from Citic, and both Evergrande and Savills, the agent handling the tender, declined to provide statements.

In July, it was reported that Evergrande was seeking to sell the tower, located in the bustling commercial area of Wan Chai, but received only a few bids that fell below HK$10 billion and the HK$12.5 billion purchase price from 2015.

The collapse of a potential $1.7 billion deal in 2021 to sell the building to state-owned Yuexiu Property significantly impacted Evergrande’s attempts to offload assets to satisfy creditor obligations after defaulting on offshore bond interest payments.