HK's Goldin Financial sells residential land at loss citing market outlook concern

Goldin Financial Holdings

11/05/2020 03:29

HONG KONG, May 11 (Reuters) - Hong Kong's Goldin Financial
Holdings Ltd  0530.HK  on Monday said it has sold a residential
land parcel at a loss of HK$2.6 billion ($335 million), in a
rare move aimed at reducing debt given an uncertain property
market amid economic downturn.
    The firm's stock rose 4.2% following the announcement.
    Selling undeveloped land bought by tender is unusual. For
Goldin, however, the sale of land in the Kai Tak district marks
the second time in a year for such a purchase to go awry.
    Last May, Goldin won the tender to buy a commercial land
parcel in the same district worth about $1.4 billion. However,
it dropped the deal a month later at the expense of its deposit
citing economic instability brought about by anti-government
protests.  urn:newsml:reuters.com:*:nL4N23I33B
    This time round, the novel coronavirus outbreak has
disrupted economic activity, clouding the outlook for the
territory's usually buoyant property market.
    Goldin in a bourse filing said it had agreed with Top Family
Group on Sunday to sell the land with a developable gross floor
area of up to 53,394 square metres for HK$7.05 billion.
    The price is 21% lower than in November 2018 when Goldin
bought the land parcel from the government for HK$8.9 billion
with plans to build residential apartments.
    "Considering the preliminary stage of development of the
property and the significant capital required for the project,
the directors adopted a prudent approach to retain more cash for
the group's existing business, against the uncertain outlook in
the property market and the overall economic downturn in Hong
Kong," Goldin said in the filing.
    The loss incurred from the sale also included interest
charges from bank loans.

($1 = 7.7511 Hong Kong dollars)

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Hong Kong firm drops $1.4 bln land purchase pact on economic
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 (Reporting by Clare Jim; Editing by Christopher Cushing)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))