Oceanwide creditors seize SF project after missed debt payment

Shenzhen-based firm says it’s in discussions with two debtholders

Oceanwide Center, 50 1st St, San Francisco, CA 94105 (Rendering © DBOX, iStock)
Oceanwide Center, 50 1st St, San Francisco, CA 94105 (Rendering © DBOX, iStock)

Oceanwide, one of China’s biggest real estate companies, lost control of its flagship San Francisco project.

Debtholders seized Oceanwide Center, which has been plagued by failed sales, $1.6 billion of ballooning costs and more than $40 million of mechanic’s liens, after two of the firm’s subsidiaries missed payments on $321.5 million of notes.

Two debtholders seized the project, along with shares in Oceanwide’s parent, China Oceanwide Holdings International, which were used as collateral for the notes, according to a filing Wednesday with the Shenzhen Stock Exchange. Oceanwide, which has only one San Francisco project, didn’t name it in the filing. Reuters reported the seizure earlier.

The two debt holders are Haitong International Financial Services’ Singaporean unit and an entity named Spring Progress Investment Solutions. Together, the firms hold a combined $2.5 billion Hong Kong dollars across two series of notes.

A unit of Shenzhen-based Oceanwide sold HK$1.1 billion of notes to Spring Progress in 2018, while another unit sold HK$1.4 billion of notes to Haitong in 2019, Oceanwide said in the filing.

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The investors’ “main rights include possession of the collateral and selling, replacing or disposing of the collateral,” Oceanwide said. The firm said it was in talks with the debtholders to come to a resolution.

In Los Angeles, the firm is developing a $1 billion-plus condo, hotel and retail project that has been stalled for the last couple of years.

On the other side of the U.S., the firm is seeking to sell its development site at the South Street Seaport in Manhattan for $200 million, far less than the $390 million it paid for it in 2016.

Oceanwide recently said it was aiming to sell its office complex in Beijing for $3 billion.

Oceanwide couldn’t be reached for comment.