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Pan Sutong’s Battle To Save His Real Estate Empire

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Pan Sutong bet billions on a massive project to build a luxurious home in Tianjin and get his hands on Chinese wealth, but the bet backfired and Pan’s creditors took his assets. would like to seize the

P.At its height, the Suton Empire had few rivals. 59 years old real estate king He once amassed a $12.2 billion fortune, including a palatial mansion next door to Hong Kong’s richest man, Li Ka-shing. He owned vineyards in California and France, and in Australia he owned over 1,200 acres of horse breeding and training grounds.

Despite never having graduated from high school, Pan has managed to golding loop Transformed into a sprawling conglomerate spanning consumer electronics, winemaking, financial services and most importantly, property. His master plan was to build Goldin Metropolitan, a sprawling mini-city in Tianjin, a port of about 14 million people about 85 miles southeast of Beijing. His projects include 12 skyscrapers, 33 mansions and he China’s tallest skyscraper at 117 stories.

But Pan’s plans are now crumbling under a mountain of debt. Work on his favorite project has nearly come to a halt, and creditors are seeking liquidation of his company in both Hong Kong and Bermuda. Even his mansion in Hong Kong had to refinance multiple times to raise much-needed cash. He was once a flashy entrepreneur, Hong Kong 6th The wealthy rankings from just five years ago now face an uphill battle just to survive.

In July, Hong Kong’s High Court ordered Pang to declare bankruptcy and liquidate one of his holding companies over HK$8 billion ($1 billion) in unpaid debt owed to Citic Bank. The order is being appealed because the tycoon and his holding company have the ability to pay off their debts in full, according to Pan’s representatives. Bank of China has filed another bankruptcy filing against him in Hong Kong, citing an additional 740 million yuan ($109 million) in unpaid debts he has not paid.

That case, which was heard on August 2, is currently pending pending the outcome of Pan’s appeal of the previous judgment. Meanwhile, Chinese bad-debt management firm Sinda Asset Management has compounded Mr. Pan’s legal troubles. bring the action It also sought 7.4 billion yuan ($1.1 billion) in unpaid loans and accrued interest related to the Tianjin project from him and several of his affiliates.

A unit of Deutsche Bank has filed a petition in Bermuda seeking the liquidation of Goldin Financial Holdings, a Hong Kong-listed company that owns Pang’s wine, finance and property development businesses.

“He has to find a way to either pay off the debt or reach a new deal with the lender,” said Kenny Ng, a securities strategist at Everbright Securities. “Otherwise, he will have no choice but to go bankrupt.”

“He has to find a way to pay off his debts or reach a new agreement with his lender or he will have no choice but to go bankrupt.”

Kenny Ng of Everbright Securities

P.Having moved to Hong Kong at the age of 21 after spending his teens in the US, an first ventured into the world of consumer electronics. He founded the Matsunichi brand in his Asian financial hub in 1993, manufacturing MP3 players and karaoke TV monitors. In 2002, he acquired Hong Kong-listed Emperor Technology Venture and renamed it Matsunichi Telecommunications Holdings. After that, he turned his attention to the Chinese real estate market, which achieved rapid growth in the 2000s, and decided to change direction.

Matsunichi was renamed Goldin Properties in 2008, the same year Pang acquired another Hong Kong-listed company called Fortuna International, later renamed Goldin Financial. A few years later, the sister company’s share price skyrocketed, soaring as much as 40% of his in a single day, bringing Pan’s net worth to his $12.2 billion in 2016. warning About the high concentration of Goldin Properties’ stock holdings after wild price movements.

A $1 billion loan from CITIC, personally guaranteed by Pang, was meant to finance him. $1.5 billion privatization of Goldin’s real estate division in 2017.

Goldin Properties focused primarily on high-end real estate. This is the department in charge of building the Tianjin mega-project. Development began in 2007 because Pan was confident in the prospects of Tianjin developing into a regional economic center. according to Gordin’s site.

Since then, however, Tianjin’s economic importance has grown to just faded, and Pang’s investment holding company, Silver Starlight, have not repaid loans that first expired in 2019. Nor did he make any other payments, except for a portion of the late payment interest for 2020, court documents show.

Construction on the skyscraper was largely halted in 2015 after receiving Goldin’s alleged $5.9 billion investment, still short of the roughly $10 billion needed to complete the project. Hmm. Today, the tall tower has become known on Chinese social media as the tallest tower in the country. run way low, Also Ruined building.

Yan Yuejin, research director of the Shanghai-based E-house China Research Institute, said Pan is trying to avoid selling Tianjin assets or land to repay creditors. It also means splitting up his real estate company.

“The Tianjin project is huge, and it’s hard to give up on Ban,” Yang said. “But if all else fails, he’ll have to sell it in exchange for cash to settle his debt problems.”

However, price is another matter. China’s President Xi Jinping has been working to bring home prices down and reduce financial leverage, which has dealt a surprising blow to the country’s property market.Developer Currently reluctant to acquire landIn particular, a great many people have run into their own cash flow problems and have recently defaulted on their debts.

For Pang, the prospect of losing control of the Tianjin project mirrors the fate that has already befallen another Trophy property: the 28-story Goldin Financial Global Center in Kowloon Bay. seized by creditors in 2020 after the company failed to pay off more than $1.3 billion in total debt collateralized by the building.

Goldin Financial Global Center is now seeking a new buyer after a previous deal to sell for a reported $1.8 billion. Canceled in May for unspecified reasons.

The building served as the headquarters of Goldin Financial, which has lost more than 90% of its value over the past five years. The company reported a nearly 40% drop in revenue to $47.2 million in the 12 months to June 2021, according to the latest financial reports available. He also said he has $956 million in current liabilities payable within 12 months, while cash and cash equivalents are only $2.1 million.

bread resigned As chairman and executive director of the company in June, he handed the reins to former vice chairman Abraham Shek Rai Him.

Meanwhile, bread I have repeated mortgages Bought his mansion in Hong Kong’s Deep Water Bay district for at least $85.6 million. In fact, just a few years after Pan, bought When he acquired the property for $319 million in 2017, he turned to his famous neighbors for help. Li Ka-shing’s CK Asset Holdings agreed to bail out his Pan with a loan in 2020, but the deal got into trouble and both parties was on the verge of taking the matter to court before they settle their differences.

Pang also has an apartment project in Hong Kong’s Ho Man Tin district that was banned from pre-sale last year in an unprecedented move by authorities over concerns over the company’s funding. His Pan representative said the Grand Homm project had already received a certificate of compliance from Hong Kong authorities at the end of August and aims to hand over all the homes within 30 days. But the timeline has been pushed back repeatedly since Pan first acquired the land parcel in 2016.

In recent years, Pang has had to step away from several other projects in Hong Kong. He waived his right to develop another housing project in Homan Tin in 2020 and forfeited his $3.2 million security deposit in 2019. stop his involvement A $1.4 billion bid for a plot of land on the former Kai Tak airport site. Goldin Financial spent about $1.2 billion to acquire another piece of land in Kai Tak in 2018, and in 2020 he sold it for $446.5 million in cash at a significant discount. handleIt also included a profit-sharing agreement that gave Goldin a 30% stake in the site’s future revenue development after a previous $898 million sale. Finished.

“Judging by Pan’s debt disputes and projects in Hong Kong, he faces a serious cash shortage,” says E-house’s Yan. “He is on the brink of bankruptcy and depends on whether he can sell more assets in Hong Kong to prevent this.”

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