| | | Special rendition pace picking up in the case of Evergrande, for justice is swift if wishing for justice satisfying, and prima facie good-enough for now.
Believe Hui shall be stripped and ... well ... flayed, figuratively, in a metaphysical sense, but also pecuniary meaning, for the greater-good common-prosperity
Seems that home tee-ed up, so cars and mistresses might soon follow
capitalism at wet-work
no such thing as golden parachute and such in China
Handcuffs, yes, but not made of gold.
circa 2018 12 14 Message 31930700
... that protocol is known as 'special rendition' ... ... others would know which fancy car in the hotel's garage would come up for sale, and which mistress / assistant would be looking for new sponsor
zerohedge.com
Evergrande Chairman Pledges Luxury $90 Million Hong Kong Mansion As Collateral For Loan
One day after China made it clear that it will require a pound of flesh from Evergrande Chairman Hui Ka Yan when it demanded that he tap his personal wealth to pay down the insolvent property developer's debt (something which he can't do as his entire fortune is currently around $7 billion, a far cry from the company's $300 billion in liabilities) we learn that an associate of Yan's recently put up a luxury house owned by the chairman in Hong Kong for loan collateral as the billionaire and his property empire face an escalating debt crisis.
According to documents from the city’s Land Registry, a property on Hong Kong Island’s Black’s Link trail, known for its wealthy communities and expansive views, was pledged Oct. 19 to the local branch of China Construction Bank in exchange for a HK$300 million loan. Market observers estimate the property’s value at HK$700 million ($90 million).
According to Caixin, the property was pledged under pressure from Evergrande’s creditors, which demanded additional security for the company’s private equity financing. As everyone is aware by now, Evergrande is struggling to repay debts amounting more than $300 billion, some of which it has defaulted on.
The property is owned by billionaire Hui, who is expected to dispose of more personal assets gradually, said the Caixin source, to be in compliance with Beijing's demands. A registration document showed that the property is owned by a company called Yuanxun Ltd. On July 30, Tan Haijun, an associate of Hui, became director of the company.
Also on July 30, Tan succeeded Hui as sole director of Giant Hill Ltd., a company that owns another luxury villa on Black’s Link trail. Hui owns the HK$800 million house as sole shareholder of Giant Hill, a situation not uncommon in Hong Kong (or New York for that matter) where many wealthy people own property through companies.
A property on Hong Kong Island’s Black’s Link trail
The relationship between Hui and Tan is unclear, although local media HK01 reported that Tan is the butler in Hui’s house. The two houses are next to each other, and both are owned by Hui’s family, according to HK01.
According to Caixin, land registry records showed that Yuanxun and Giant Hill were both registered in Hong Kong in March 2006. The companies bought the two Black’s Link properties in August 2009 without disclosing financial details.
After the directorship transfer in Giant Hill, Hui remains the sole shareholder of the company. Industry experts said the personnel change is an attempt to make it easier for Hui to deal with the offshore asset as he lives on the Chinese mainland. It can give Hui more flexibility, as Tan now has the right to handle the company’s operations, such as pledging the property for loans or even selling it, a real estate agent specializing in luxury properties said.
In other words, it is the Evergrande Chairman himself who is starting to liquidatepledge personal assets for new funds.
And just to make sure that Hui liquidates a whole lot more assets, overnight Bloomberg published an article looking squarely at the Chairman's wealth, asking "just how much money does Hui have? The sum -- while likely to be a tiny fraction of Evergrande’s more than $300 billion in liabilities -- may help determine the severity of a crisis that has roiled China’s credit market and undermined confidence in a real estate sector that accounts for about a quarter of the nation’s economic output."
Bloomberg's own estimate is similar to the one we noted yesterday, namely around $7.6 billion, down from $42 billion at its peak in 2017, yet what Bloomberg does add is that Hui "has received more than $7 billion in dividends since the company started trading in 2009, the most among 82 Chinese tycoons tracked by Bloomberg."
As such, "the question of where Hui’s personal wealth has flowed may now factor into whether his company has the ability to keep paying debts in the near term. He wouldn’t be the first Chinese property tycoon to provide his firm with much-needed funding: Guangzhou R&F Properties Co.’s stock surged last month after major shareholders pledged $1 billion in financing."
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As such, the question of where Hui’s personal wealth has flowed may now factor into whether his company has the ability to keep paying debts in the near term. He wouldn’t be the first Chinese property tycoon to provide his firm with much-needed funding: Guangzhou R&F Properties Co.’s stock surged last month after major shareholders pledged $1 billion in financing.
And while we appreciate Bloomberg's effort to shine the projector on how and where Hui's wealth currently is, the bottom line is that even if every last cent was expropriated by Beijing, it would barely make an impact on creditor recoveries once the company inevitably defaults.
Meanwhile, Evergrande's own efforts to liquidate its assets took an ugly turn when the company abandoned talks to sell a stake in its property-management arm and said it hasn’t made further progress on asset sales. Evergrande’s real estate sales plunged about 97% during the peak home-buying season, further crimping its ability to generate funds. |
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