Hong Kong developer Parkview Group has missed an interest payment on a US$940 million loan backed by one of its flagship properties in Beijing, raising fresh concerns about the company’s financial stability.
The builder failed to pay 50 million yuan (US$7.4 million) in interest that was due in early June, according to people familiar with the matter who asked not to be identified. The loan, secured against the Parkview Green complex in Beijing’s Chaoyang district, was refinanced last December after two brief extensions. The refinancing process involved multiple rounds of negotiations with lenders.
The Parkview Green complex, which serves as collateral for the loan, is a mixed-use development. Its distinctive glass-enclosed design and integration of contemporary art installations have made it a recognizable landmark in Beijing’s central business district.
Banks hold back on declaring default
While the loan agreement allows lenders to call a default, none have taken that step yet. The facility includes portions denominated in both yuan and dollars. Parkview had previously sought help from a private lender to cover the missed payment.
Related: Vietnam widens graft probe into $16bn airport project
That effort collapsed when the potential lender demanded repayment priority over the existing syndicate of banks—a condition that required unanimous approval. Taiwanese lender Bank of Panhsin rejected the proposal, according to the people familiar with the situation. Bank of Panhsin told Bloomberg the decision was made to protect the rights of the syndicate banks. It added that it prefers Parkview sell the underlying real estate asset rather than extend the loan or bring in new funding that would rank senior to the existing debt.
Art sales and refinancing struggles
The loan has a one-year term with an option to extend for up to two years. The refinancing last December followed months of negotiations, during which Parkview considered selling artwork from the Parkview Green collection valued at over HK$200 million (US$25.5 million) to secure creditor support.
The company has not responded to requests for comment. Parkview Green, known for its glass architecture and contemporary art collection, is one of several high-profile assets in the company’s portfolio. Others include the Hong Kong Parkview residential complex and Parkview Square in Singapore, according to its website.
The missed payment comes as China’s property crisis continues to pressure developers. For Parkview, the immediate challenge is finding alternative funding while lenders assess their options for recovering their money.