Oaktree Capital has scuppered a plan to restructure Evergrande’s $20bn of offshore debts by seizing a vast and vital Hong Kong plot.
Los Angeles-based Oaktree this week moved to seize control of the asset after Evergrande defaulted on a loan against which the $158bn asset manager had security.
The plot is known as “Project Castle” as it was where the ailing property developer’s chair, Hui Ka Yan, intended to build a 2.2m sq ft Versailles-like mansion.
Project Castle, it seems, was set to form a significant chunk of the assets that would facilitate the restructuring of the company’s offshore debts, but that now seems unlikely after Oaktree appointed a receiver.
“Evergrande has got the offshore bondholders to stop making noise on the basis that there is a restructuring process coming soon,” said one person close to the deal. “That land was going to be used to facilitate the restructuring.”
The appointment of the receiver has to be approved by a Hong Kong court, after which the asset “will be removed from the general restructuring of Evergrande”.
