Chinese conglomerate HNA Group is planning to utilize funding from various financing schemes to fund the development of four residential sites in Hong Kong that were acquired by the company for a total of HK$27.2 billion, the South China Morning Post reported.
Huang Qijun, a director at HNA Group and chairman of HNA unit Hong Kong International Construction Investment Management Group, or HKICIM, was cited in the Oct. 16 report as saying the company is seeking to use its listed arms' investment funds and loans from financial institutions, among other financing means, to develop the area that used to house the former Hong Kong airport into a residential project.
The director's statement comes on the back of media reports that two of the three banks that lent the HK$3.5 billion used in the acquisition of one of the sites have chosen not to refinance, amid China's intensified probe on HNA debt-fueled purchases. Previously, there was also talk of four out of the eight lenders of the company's US$1.5 billion short-term financing have decided not to provide new loans for its construction projects, while three of the banks have yet to make a decision.
However, Huang countered this by telling the publication that the company has enough funds for the project, elaborating that HNA has HK$2.7 billion cash on hand and HK$9.25 billion more that was raised through a rights issuance early in 2017.
According to another SCMP report dated Oct. 13, HKICIM contributed HK$728 million to a fund to develop the most expensive site in the project — plot 6565. The subsidiary's contribution accounts for 12.07% of the HK$6.03 billion fund, while the rest is owned by Hisea International Co. Ltd., another HNA unit.
The living area in the site covers 2 million square feet of space, and construction works began Oct. 16. The development cost of the project is estimated to come in at north of HK$10 billion, with 1,900 residential units spread across seven high-rise buildings, 12 low-rise blocks and four villas. Presales are anticipated to start in the third quarter of 2019.