Ares seeks to buy most of HK$10.2 billion loan for Hong Kong tower

ALTERNATIVE investment manager Ares Management has sent a proposal in recent days to some banks to buy out a stake in a HK$10.2 billion (S$1.8 billion) project loan backing luxury-property development The Corniche in Hong Kong, according to sources familiar with the matter.

In its initial proposal, Ares is offering a price of 95 cents on the US dollar for the syndicated loan, said the sources, 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 sources.

The banks held meetings on Monday (Apr 8) to discuss the potential deal, the source 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 and KWG Group Holdings. 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 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 sources familiar with the matter. BLOOMBERG