Chinese tycoon Chen Hongtian in talks with banks to resolve ‘mild’ mortgage defaults on Hong Kong property worth US$1.27 billion
- Talks on repayments are proceeding with banks and there are plans to sell a stake in a commercial tower, says Chen Hongtian, the chairman of Cheung Kei Group
- The three properties mortgaged with the banks for HK$6 billion are worth HK$10 billion, tycoon says
Chinese tycoon Chen Hongtian is in discussions with lenders to retrieve assets worth HK$10 billion (US$1.27 billion) after a “short-term liquidity issue” forced him to miss mortgage payments.
There are plans to inject fresh funds to resolve the “mild default” issue related to three properties, including a HK$2.1 billion house on The Peak, said the chairman of Cheung Kei Group, which owns offices, hotels and finance firms in Hong Kong.
“We’re in talks with the banks about repayment arrangements for two residential properties, and we’re talking to a friend about buying some shares in Cheung Kei Center,” he said in an interview on Friday, without elaborating.
“My company has the ability to handle short-term liquidity issues. I hope the third parties can give us some space and do not interrupt the company’s normal operation.”
The three properties – a 9,212 sq ft house at 15 Gough Hill Road, a flat in Opus Hong Kong in eastern Mid-Levels and Cheung Kei Center commercial building in Hung Hom – were mortgaged with banks for around HK$6 billion, but were valued at around HK$10 billion, according to Chen.
The previous month the Opus Hong Kong flat was seized by Bank of Communications, which had extended a mortgage in August 2019.
Chen urged “the public and financial institutions to have more understanding and tolerance for entrepreneurs and to look at companies’ ‘mild default’ issues rationally”, adding that the current economic landscape was challenging.
“Otherwise, more companies will be entangled in long-term legal disputes and it will hit investor confidence.”
Chen said he has been investing in the city and overseas for a few decades, and counts himself as a “Hong Kong businessman”.
He came into the limelight after buying the Gough Hill Road property for a then record HK$2.1 billion in 2016, ranking among some of the most expensive homes in the world.
In 2022, Hurun Report named Chen the 172nd richest individual in China, the same ranking as Hui Ka-yan, the chairman of China Evergrande Group, the world’s most indebted developer, and his neighbour on The Peak.
Beijing’s crackdown on the property sector since 2021 has led to defaults and financial distress at many mainland-based developers.
Like Chen, Hui also lost his house on The Peak in March. Centaline Property Agency and CBRE were appointed sole co-agents to sell 10B, Black’s Link, an ultra-luxury mansion valued at more than HK$800 million.
