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Troubled creditor China Evergrande Group (HK:3333) has lost a Hong Kong tower it bought for $1.6 billion, but its creditors are still trying to sell the building almost a year after the confiscation, writes Bloomberg.
The tower failed to find buyers despite renovations and a name change, while the Hong Kong office property market has been in a severe downturn in recent years.
Evergrande's financial problems have taken their toll on a building in Hong Kong's bustling Wan Chai area, where several elevators are out of service because the developer failed to pay the contractor. And even the renovations weren't enough to raise the tower's value: its floor price is estimated to be nearly $1 billion less than Evergrande paid for it in 2015, implying a serious loss for the company and creditors.
It's also a blow to other creditors awaiting reimbursement from a debt restructuring plan that the developer is now trying to speed up after losses totaling $81 billion were revealed this week in long-delayed results.
A developer's assets in Hong Kong, which were bought at record high prices, may not attract bids even at a discount, making it difficult to collect debts.
So far, there have been several significant investigations into distressed assets under management, including former developer China Evergrande Centre, but few deals have been made due to diverging expectations of fair property values.
