China Oceanwide Holdings vows to fight back on both sides of the Pacific after creditors traveled to Bermuda to slap its Hong Kong-listed entity with a liquidation petition earlier this month and a Beijing court froze the assets ashore after a creditor demanded RMB 1.98 billion. (296 million dollars) of bond repayments, according to an announcement made Tuesday at the Shenzhen Stock Exchange.
The pair of setbacks for Oceanwide came after creditor-appointed receivers of its $410 million 80 South Street development seized the Lower Manhattan project last month, with that same debt triggering a court order in Bermuda to liquidate the Oceanwide vehicle listed in Hong Kong.
In a filing last Friday, Oceanwide claimed that, having already been stripped of its New York price of more than $175 million in unpaid debt, its US creditors were going too far in suing the developer in its Caribbean home.
“Since the remaining amount of the claim has been covered by the pledged property, the company will vigorously oppose the petition,” Oceanwide told the Hong Kong Stock Exchangenoting that the New York property had a book value of $220 million at the end of last year.
On Thursday last week, DW 80 South LLC filed for liquidation in the Supreme Court of Bermuda on the grounds that the developer failed to pay an outstanding sum of $175 million, the Hong-listed unit said. Oceanwide Group’s Kong in Friday’s Filing.
Once one of China’s most aggressive cross-border investors, Oceanwide has struggled since Beijing restricted international capital flows in 2018 and tipped into insolvency since the country tightened domestic credit with U.S. policies. three red lines promulgated in 2020.
Earlier filings by the Beijing-based builder show it took out a $175m loan secured by its high-rise project in New York’s South Street Seaport area and took a six-month extension on that debt two years in May 2021.
The Chinese developer defaulted when it missed a $1.3 million interest payment in January and the Lower Manhattan property, 80 South Street, went into receivership last month.
Lack of domestic obligation
Oceanwide Holdings Co Ltd, the Shenzhen-listed unit, said in a depot (in Chinese) on Monday that the Beijing Financial Court froze its 31% stake in Minsheng Securities for a period of three years.
Oceanwide is Minsheng Securities’ largest shareholder, according to its 2021 annual report.
The company discovered the asset was frozen due to its disputes with China Minsheng Trust Co Ltd, and a previous filing by the company on April 23 disclosed details of the lawsuit, Oceanwide said in the statement.
“The company will endeavor to resolve disputes as soon as possible so that the company’s frozen assets can be released,” he said.
Minsheng Trust, which defaulted on several of its own trust products due to a cash crunch, filed a lawsuit with the Beijing Financial Court for a claim against the Shenzhen-listed company to prepay a total of 1.98 billion RMB ($296 million) in principal, plus interest, for three Oceanwide domestic bonds he purchased in 2020, according to April Oceanwide Disclosure (in Chinese).
These include RMB 573.2 million of principal for the 20 Fankong 01 bonds which will mature in January 2023, RMB 816.4 million of principal for the 20 Fanhai 01 bonds which will mature in June 2023 and RMB 594.8 million in principal for the 20 Fanhai 02 bonds which will mature in July 2023, together with the corresponding interest.
Additionally, Minsheng Trust is demanding that Oceanwide Group and its founder Lu Zhiqiang be held accountable for debt repayment.
The offshore empire is collapsing
Founded in 1985, Oceanwide started as a property developer and has grown into one of China’s largest conglomerates, with investments in banking, insurance, energy, media and technology.
Over the past decade, he has joined the rush of Chinese investors pouring more than $235 billion into overseas acquisitions, ranging from trophy hotels to Hollywood movie studios.
Oceanwide bought the New York property for $390 million in 2016 and invested another $20 million in the site, although construction never started.
The company planned to build a single tower combining commercial and residential spaces that could reach over 304 meters (1,000 feet) in height. But after plans were scrapped, Oceanwide began marketing the site for around $300 million in 2019 and lowered its asking price to $200 million last year.
Without its New York ownership, Oceanwide is now just one project in the United States – a 185,806 square meter (2 million square foot) unfinished hotel, condo and retail development in Los Angeles dubbed Oceanwide Plaza. .
Last October, creditors seized the Oceanwide mixed-use project in San Francisco after the company defaulted on the repayment of a $320 million bond. The development is now for sale.
In March, Oceanwide agreed to sell its Kapolei West residential site on the Hawaiian island of Oahu to a local company at a loss of $24.8 million.
The company said in its annual report in March that it planned to sell its three projects in Hawaii and its supertall South Street Seaport development in New York this year so it could focus on the long-delayed Oceanwide Plaza project in Los Angeles. .
Oceanwide suffered a net loss of HK$5.36 billion ($680 million) last year, up from a deficit of HK$926.6 million the previous year, according to the 2021 annual report. of the society.