US$940m mall loan deadline looms

Cash-strapped builder Parkview Group has until March 17 to avoid a potential default on a US$940 million (HK$7.3 billion) loan tied to a landmark mall complex in Beijing, according to people familiar with the matter.

Parkview's interest reserve account - funds set aside to service charges on the loan -- is about 20 million yuan (HK$21.4 million) short of the amount required to be maintained at all times, the people said.

The borrower on March 6 had used the funds to partially settle the facility's quarterly interest payment of roughly 55 million yuan, the people added.

According to the loan's terms, Parkview is required to maintain at least the same level of reserve funds in the account, the people said. If the amount drops below around 55 million yuan, as it did after the March 6 payment, the company has 10 days to top it up, or an event of default will be triggered, the people added.

The loan is secured by an iconic commercial complex in Beijing called Parkview Green, locally known as Fang Cao Di.

Meanwhile, Parkview is also facing mounting pressure in Hong Kong as the group looks to refinance its Hong Kong Parkview project, an apartment complex located in the city's southern district, through a private credit loan.

Bloomberg