Chinese Company Is Said to Pull Out of Record H.K. Office Deal
(Bloomberg) -- A state-owned Chinese energy company has pulled out of a record $5.2 billion deal to buy most of a Hong Kong skyscraper from billionaire Li Ka-Shing’s company, according to people familiar with the matter.
Hui Wing Mau, chairman of developer Shimao Property Holdings Ltd., and Pollyanna Chu Yuet Wah, the billionaire co-founder of Kingston Financial Group Ltd., will join the consortium as new investors after China Energy Reserve & Chemicals Group backed out, said the people, who asked not to be identified because the information hasn’t been publicly disclosed. Hui plans to take a 20 percent stake in the deal, while Chu will take a 17 percent stake, they said.
Shimao’s Investor Relations Senior Manager Eva Lau said the company has no comment on the chairman’s personal investment. Kingston’s Chu, China Energy and CK Asset Holdings didn’t respond to requests seeking comment on the matter, which was reported earlier by Reuters.
China Energy was unknown in property circles when it emerged in November as the surprise leader of a consortium to acquire a stake in The Center from CK Asset Holdings Ltd., in a record-breaking deal for commercial building. The acquisition came even as China clamped down on overseas investments by its most prolific dealmakers, stoking optimism that demand from mainland buyers would continue to fuel Hong Kong’s property market.
It’s unclear why China Energy backed out of the deal. In recent months, China has intensified its scrutiny of acquisitive companies such as Anbang Insurance Group Co. and HNA Group. This month, Chinese regulators seized insurer Anbang for at least a year and prosecuted its founder on charges including fraud, following an overseas buying binge.
China Energy was to have taken a 55 percent stake in the purchaser, C.H.M.T. Peaceful Development Asia Property Ltd., which is a British Virgin Islands special purpose vehicle set up for the acquisition.
The 73-story tower in the Central business district is the city’s fifth-tallest, according to the Skyscraper Center. Hong Kong’s skyscrapers command the highest rents in the world, according to a report from Knight Frank.
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