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Tender sale of Evergrande's Hong Kong headquarters fails again -sources

Published 01/03/2023, 03:29 AM
Updated 01/03/2023, 04:20 AM
© Reuters. FILE PHOTO: The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song

By Clare Jim

HONG KONG (Reuters) - A tender for the sale of embattled China Evergrande Group's headquarters in Hong Kong has lapsed again, two sources with knowledge of the matter said on Tuesday, because the offer prices and terms fell short of requirements.

Lenders to the office tower, China Evergrande Centre, valued at between HK$8 billion and HK$9 billion ($1.02 billion and $1.15 billion), appointed a receiver in September to seize the asset and tender it for sale with a bid deadline of Oct 31.

Evergrande, saddled with liabilities of more than $300 billion, is at the centre of China's unprecedented property sector crisis, and had been trying to sell the 27-storey tower to raise cash before it was seized.

The tower had been pledged against a loan of HK$7.6 billion from lenders led by the Hong Kong subsidiary of Chinese state-owned China Citic Bank Corp Ltd.

One of the sources close to Citic said the lenders may put the asset on sale again when market conditions are more stable than the second half of last year.

The sources sought anonymity as the sale talks were confidential.

Citic did not immediately respond to a request for comment. Evergrande and Savills, the agent for the tender sale, declined to comment.

Reuters reported in July that Evergrande was looking to sell the tower, located in the busy commercial district of Wan Chai, by tender, but drew only a couple of bids, with offers below HK$10 billion and its 2015 HK$12.5 billion purchase price.

© Reuters. FILE PHOTO: The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song

The 2021 collapse of a potential $1.7 billion deal to sell the building to Chinese state-owned Yuexiu Property dealt a blow to Evergrande's efforts to divest assets to repay creditors after missing interest payments on offshore bonds.

($1=7.8102 Hong Kong dollars)

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