Receivers reportedly dumped 5 Churchill Place at a 60% markdown to Chen’s purchase price (Image: Savills)
Mainland tycoon Chen Hongtian has received demands from a pair of banks to repay more than HK$1.6 billion ($200 million) in overdue loans and interest charges, according to a media account, as liquidators continue to market global properties linked to the cash-strapped chairman of Cheung Kei Group.
Hong Kong-based Nanyang Commercial Bank, a unit of state-owned China Cinda Asset Management, has demanded payment from Chen and his wife on five overdue term-loan facilities totalling HK$799 million ($102 million) plus default interest, according to a writ seen by Bloomberg, which reported the details on Monday.
Nanyang’s demand followed a separate call last month by Singapore-based regional lender UOB seeking payment of loan principal and unpaid interest, plus default interest, totalling HK$848 million, the news agency said.
A liquidity crisis at Hong Kong-based Cheung Kei has triggered a fire sale of formerly Chen-owned assets in the Asian financial hub and in London, where receivers have reportedly agreed to sell the 5 Churchill Place office block in Canary Wharf for £110 million ($134 million) — 60 percent less than what the Shenzhen tycoon paid for the property in 2017.
Distress Calls
A market source identified the buyer of 5 Churchill Place as Israeli real estate investment firm Ariomori Group, confirming details first reported by London’s React News. The receivers had been appointed by Cheung Kei’s creditors to take over the 12-storey property last May.
Cheung Kei Group chairman Chen Hongtian
Cheung Kei and its chairman had paid £270 million to acquire the one-time Bear Stearns headquarters in 2017, the same year they also purchased Canary Wharf’s 20 Canada Square. Receivers seized that 12-storey tower last June and are now preparing to market the 581,457 square foot (54,019 square metre) building, according to market sources.
Before the seizure of 5 Churchill Place, Cheung Kei and Chen had attempted to sell the 2009-vintage property for £260 million. Anchor tenant JP Morgan Markets provides 88 percent of the rental income from the building, which also welcomed French bank Credit Agricole and the World Association of Nuclear Operators as tenants last July.
The mainland investor had paid £410 million to acquire 20 Canada Square in July 2017 and failed to find a buyer for the asset in early 2022 at an asking price of £385 million.
Global Retreat
In March of last year, receivers took control of Cheung Kei’s former headquarters in Kowloon’s Hung Hom area and put the office property, which the mainland firm had acquired for HK$4.5 billion (then $580 million) in 2016, on the market two months later.
Last August, receivers sold Chen’s former apartment in Hong Kong’s Mid-Levels at 38 percent below market value in a HK$420 million deal after the tycoon defaulted on a HK$500 million mortgage on the property.
Receivers seized Chen’s mansion at 15 Gough Hill Road on Hong Kong’s Peak last year, with that property still looking for a buyer.
Note: An earlier version of this story referred to the banks filing writs against Cheung Kei Holdings as Hong Kong banks. One of the two banks, UOB, is based in Singapore. Mingtiandi regrets any misunderstanding.