A subsidiary of HNA Group has once again asked for more time to arrange financing for a luxury development planned for the former Kai Tak airport in Hong Kong, as the company struggles to deal with its mounting debt.
Hong Kong International Investment Group Co. asked for six more months to arrange a bridge loan for the project and received an extension through July 15, Bloomberg reported. HNA, which has racked up significant debt in recent years through a series of acquisitions, already secured a three-month extension on another loan for the project. Apartments in the building are expected to hit the market in 2019.
“We have planned meticulously on all aspects of the development and funding of the project, and the company has a good relationship with the bankers,” according to a statement issued by HNA. “We can speak with confidence that we have secured sufficient capital to support development of this project and the project will proceed smoothly as planned.”
The conglomerate paid about $3.5 billion to buy the four parcels in the outskirts of Hong Kong, beating 14 other developers for the 400,000 square feet of land. Thomas Lam, a senior director of Knight Frank, told the South China Morning Post in March that apartments would have to sell for at least HK $3,100 a square foot.
In September, HNA said its financial health was sound and it would have no troubles landing financing for the Hong Kong megaproject.
The company is dealing with $100 billion in debt, 25 percent of which comes due this year. To cope, HNA plans to sell off $6 billion worth of its real estate holdings. The company is reportedly considering the sale of a number of its U.S. properties, including 850 Third Avenue and 1180 Sixth Avenue in Manhattan. HNA has maintained that it will hold onto its trophy office tower at 245 Park Avenue.
The Wall Street Journal reported earlier this month that investors in an online lending platform owned by HNA Group had yet to be paid returns on their investments that were due in November. [Bloomberg] — Kathryn Brenzel