Mirae seeks sale of HK Goldin assets to recoup investment

Mirae Asset Securities Co., South Korea’s largest brokerage house, plans a public tender of assets held by debt-laden Goldin Financial Holdings Ltd. to recover the investment in an office building in Hong Kong used as the headquarters of the property developer.

Creditors of Goldin Financial Global Center including Mirae Asset have recently signed a due diligence agreement to sell assets of Goldin Financial Holdings such as wineries through a public tender next year, said investment banking industry sources in Seoul on Thursday.

Mirae Asset in April 2019 invested $243 million in a mezzanine tranche on the office tower located at the Kowloon East waterfront, becoming the only South Korean institution to join the financing worth 1.5 trillion won ($1.1 billion) for the 28-story building, in which Singapore sovereign wealth fund GIC and Deutsche Bank participated, according to the sources.

Mirae Asset used its own money to finance about 10% of the mezzanine deal and raised money for the rest from investors in South Korea including other securities firms, insurers, pension funds and rich individuals.

The investment had been regarded as safer than other mezzanine deals as it was guaranteed by Goldin Financial Holdings and its former chairman Pan Sutong, a Hong Kong billionaire listed as one of Asia’s richest men by Forbes. Pan expanded businesses extended to Napa Valley and French vineyards, as well as horse-breeding.

FAILED REPAYMENT

But Goldin Finance Holdings failed to repay the debt as Hong Kong’s commercial property market was hit by anti-government protests, which drove away mainland Chinese tourists and investors, and repeated partial lockdowns due to COVID-19.

Receivers appointed by Deutsche Bank affiliate DB Trustee sold the 28-storey tower to a joint venture between Asia-focused investment firm PAG and Singapore-based real estate group Mapletree Investment for $713 million in January.

Creditors including Mirae Asset have been seeking to recover their investments through sales of Goldin Financial Holdings’ assets. They have been requesting Goldin Financial Holdings and Pan to fulfill the guarantees since 2020 when the company had refinancing problems. The Supreme Court of Bermuda where Goldin Financial Holdings was founded, ordered the company to wind up in August this year. The order is a court instruction to close down the company and liquidate its assets.

Goldin Financial Holdings was estimated to have assets totalling some 1.5 trillion won as of the first half of 2022 including wineries.

Creditors of the mezzanine tranche expected to recover much of the loan if they sell blue chip assets of the company, sources in Seoul said.

“We have been in talks on various debt collection measures,” said a Mirae Asset official in Seoul. “We are doing our utmost to maximize the debt collection.”

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com
 
Jongwoo Cheon edited this article.