Deloitte China Financial Advisory advised Bank Syndicate in a HK$12B rescue refinancing relating to a high-value residential project located in Kowloon, Hong Kong

Published date: 5 July 2023

Deloitte China Financial Advisory (“Deloitte FA”), as the financial advisor to a group of bank creditors, assisted in the successful refinancing and turnaround of the high-value offshore residential project owned by a top-tier Chinese real estate group (the “Group”), situated in Kowloon, Hong Kong. The project was said to be the most valuable offshore luxurious residential development project of the Group, consisting of high-rise apartment towers and private villas, with a gross floor area of over 600,000 ft² and a projected value of over HK$20 billion upon completion.

The Group is one of the largest real estate developers in China, and along with many of its peers in this industry, the Group had been facing challenges with respect to its mounting debts. Prior to the successful refinancing, the developer faced liquidity issues, breached various loan obligations and was unable to continue to fund the project construction, which could have resulted in one of the largest unfinished and abandoned real estate developments in Hong Kong’s history. In 2022, Deloitte FA advised the banks on the successful refinancing of this high-profile but troubled residential development project.

Deloitte FA's Value Creation & Crisis Advisory team ("VC&C") played a critical role in devising a feasible HK$12 billion rescue financing structure after analysing project valuations and cash flow projections, and assisting in complex negotiations amongst stakeholders to drive a consensual rescue financing from beginning to end. The rescue financing deal was concluded within a short but intense period of 2 months, and avoided a massive crisis with the projected value of the project largely retained. Several bank creditors fully exited from the syndicated loan unscathed.

The China Business Law Journal recognized the remarkable success of this refinancing and turnaround transaction as one of the "Deals of the Year 2022."

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