Chinese builder Hopson in talks with Temasek unit for loan

CHINESE builder Hopson Development Holdings is in talks for a new private loan to refinance an expired bridge facility that backed the purchase of some property in Hong Kong, according to sources familiar with the matter.

Discussions for the new loan with Seatown Holdings, a subsidiary of Singaporean sovereign fund Temasek Holdings, are ongoing, the sources said. Earlier this year, Hopson, whose projects include high-end residential and commercial properties in Beijing and Guangzhou, received a four-month bridge loan of around US$100 million to US$115 million from Seatown.

Seatown has not asked for immediate repayment for the bridge loan, which was due in September, and instead both parties are engaged in negotiating a new facility, the sources said. The new loan will include different pricing, the sources added. It’s unclear what the size will be.

Like many Chinese developers, Hopson has faced slumping sales as the country remains mired in a years-long property crisis. While the government has rolled out stimulus measures recently, risks for builders remain high. At least 20 Chinese developers have faced wind-up petitions, according to data compiled by Bloomberg.

Hopson’s bridge loan was to extend the maturity of a US$165 million 2023 loan from Seatown that was used to fund Hopson’s acquisition of two floors and four parking lots spaces at The Center, located in Hong Kong’s central business district.

Seatown declined to comment, saying that it does not speak on specific transactions or speculation. Hopson did not respond to an e-mailed request for comment.

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Hopson had total assets of HK$287.5 billion (S$48.9 billion) as at Jun 30, according to its interim report.

Fitch Ratings affirmed Hopson’s B rating, with a stable outlook in an October statement. The firm “faces manageable refinancing risk” and alongside its current liquidity should be “sufficient to meet near-term debt repayments”, Fitch said. BLOOMBERG