Hong Kong Developer Grand Ming Group Holdings Defaults on Loans

Grand Ming Group Holdings is the latest Hong Kong-based developer to default on its loans.

The Chatham Road South-located firm filed documents with the Hong Kong stock exchange on Tuesday saying that it had breached financial covenants under its loan facilities, the South China Morning Post reported. The company told investors that it hasn’t repaid a HK$4.8 billion (US$611.4 million) loan as the company’s gearing ratio rose to 214 percent from 199 percent in the previous year.

Grand Ming is in the process of securing waivers from lenders regarding the breach related to loans totaling approximately HK$2.8 billion (US$357 million). Still, the company hasn’t received any demands to immediately repay the debts.

For the year ending March 31, Grand Ming posted a loss of HK$292.1 million (US$37.2 million), marking a sharp drop from a net profit of HK$298.5 million (US$38 million) the year prior. Net liabilities were approximately HK$3.8 billion (US$484 million) compared to HK$381,870 (US$48,646) a year earlier. Altogether, the firm had about HK$180.2 million (US$23 million) on hand and pledged to secure bank loans of nearly HK$5.2 billion (US$662.5 million) with assets totaling around HK$8.1 billion ($US1 billion).

Grand Ming’s default comes just a few weeks after Emperor International Holdings announced it similarly had outstanding loans of HK$16.6 billion (US$2.1 billion).

“Banks may request immediate repayment of these bank borrowings,” Emperor International said on June 27, noting that the loans had been classified as current liabilities as of March 31, according to the South China Morning Post. Emperor said it was negotiating with banks to hammer out a restructuring plan. The Hong Kong-based development investment company is controlled by entertainment mogul Albert Yeung Sau-shing, once one of Forbes’ 50 richest Hong Kong residents with a net worth of $1.3 billion.

Grand Ming has developed several residential high-rise properties across Hong Kong. Past developments include The Grands at 45 Pau Chung Street in To Kwan Wan; The Grand Marine at 18 Sai Shan Road in Tsing Yi; and Cristallo at 279 Prince Edward Road West in Ho Man Tin.— Chris Malone Méndez