Ares seeks to buy loan backing Hong Kong property development

Alternative investment manager Ares Management Corp. has sent a proposal in recent days to some banks to buy out a stake in a HK$10.2 billion (US$1.3 billion) project loan backing luxury-property development The Corniche in Hong Kong, according to people familiar with the matter. 

In its initial proposal, Ares is offering a price of 95 cents on the dollar for the syndicated loan, said the people, asking not to be identified as the matter is private. Ares is seeking to buy a majority stake, or two-thirds of the loan, according to one of the people. The banks held meetings Monday to discuss the potential deal, the person added, but it could take a few months to complete. The syndicated loan will mature on Aug. 25, Bloomberg-compiled data show. 

A spokesperson for Ares declined to comment. 

The developers and owners of The Corniche are distressed Chinese builders Logan Group Co. and KWG Group Holdings Ltd. The companies paid a record HK$16.9 billion for the site in 2017, during China’s property boom. As the country’s economic growth has slowed, there are fewer wealthy Chinese buyers willing to shell out for apartments in The Corniche. Since 2023, the project has sold five out of the 295 units being marketed, according to the development’s website. 

Hong Kong billionaire Li Ka-shing’s real estate arm CK Asset Holdings Ltd. was in talks with existing lenders last year for a potential majority stake in the loan, Bloomberg reported in June. The deal eventually fell apart after CK Asset asked for a steeper-than-expected discount, said one of the people familiar with the matter. 

(Bloomberg)