(Bloomberg) — Hong Kong developer Lai Solar Improvement Co. has been working to win banks’ backing for a HK$3.5 billion ($446 million) mortgage refinancing deal, however after about six months of talks, almost half the lenders nonetheless aren’t on board, in keeping with individuals accustomed to the matter.
The property agency — managed by native tycoon Peter Lam — has secured commitments from 9 out of the unique 19 lenders for the five-year refinancing, stated the individuals, who declined to be recognized discussing personal issues. The prevailing mortgage matures on Oct. 5, in keeping with Bloomberg-compiled knowledge, including urgency to Lai Solar’s efforts.
Even when Lai Solar doesn’t handle to safe the goal quantity from all banks, it might nonetheless choose to partially repay the mortgage and refinance the remainder, the individuals stated.
Lai Solar’s financing challenges underscore the depth of Hong Kong’s years-long property downturn, which has made banks cautious about lending to builders within the metropolis. The corporate has already spent longer on its deal than property large New World Improvement Co. took to finish its current report mortgage refinancing, a course of that solely materialized after months of negotiations and conferences between banks and regulators.
Lai Solar’s authentic mortgage was backed by its Cheung Sha Wan Plaza workplace tower and procuring middle in Hong Kong’s Kowloon district, and the refinancing can be too. The corporate has proposed an all-in pricing of about 160 foundation factors over the Hong Kong InterBank Provided Charge for the refinancing, the individuals stated.
The money move generated from Cheung Sha Wan Plaza can be adequate to cowl curiosity bills on the present borrowing, in keeping with the individuals. Lai Solar stated in its interim outcomes that the tower had an occupancy fee of 92.1%, producing HK$131 million in rental revenue for the six months to Jan. 31, down from HK$143 million a 12 months earlier.
Lai Solar Improvement is the property arm of Hong Kong conglomerate Lai Solar Group, which can be identified for its media and leisure companies. The father or mother’s monetary place has been underneath the highlight since final 12 months, when it shut a few of its eating places in Hong Kong, together with Michelin-starred ZEST by Konishi.
The true property unit reported a internet lack of about HK$117.8 million for the six months ended January, narrowing from the year-earlier interval. Property gross sales fell 33.2% to HK$617.2 million.
Individually, Lai Solar can be in talks to refinance one other financial institution mortgage backed by a few of the firm’s onshore belongings, together with Hong Kong Plaza in Shanghai, different individuals stated. The HK$3.97 billion mortgage is because of mature in early 2026, they added.
Lai Solar didn’t instantly reply to a request for remark.
Lai Solar had HK$34 billion of whole liabilities as of Jan. 31, in keeping with its newest interim report. Its 5% greenback be aware with $493 million excellent is buying and selling at about 52 cents, in keeping with knowledge compiled by Bloomberg, a distressed stage reflecting investor considerations.
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