Distressed Builder Parkview Weighs Selling Artwork to Repay Debt
Parkview is mulling to sell over 300 artworks displayed at Parkview Green to repay a small part of a $940 million loan due in August, the people said, who asked not to be named discussing private matters. The valuation of the art is provided by the company to the banks.
The cash-strapped developer has been in months-long talks with banks for the refinancing, which would extend the maturity by three years, the people said. Parkview is offering some other residential properties in Beijing as additional collateral, on top of Parkview Green, according to one of the people.
Parkview didn't respond to requests for comment.
Parkview's credit enhancement proposal comes as worries grow over the builder's ability to repay the facility. Rental income generated from the commercial complex — which includes office towers, a shopping mall, an art center and a boutique hotel — fell short of covering the loan's interest expenses, Bloomberg News reported.
Parkview is also among the many smaller Hong Kong developers experiencing liquidity stress as banks tighten their screws by demanding stricter refinancing terms and higher credit enhancements amid a years-long slump in the city's real estate sector.
Located in Beijing's central business district, Parkview Green houses art pieces from the likes of Salvador Dali and Chinese artists such as Chen Wenling and Wang Luyan, according to its website. Dali's renowned Dragon Swan Elephant sculpture, is among the artwork potentially up for sale, said one of the people.
Separately, Parkview held discussions with international auction house Sotheby's for a loan backed by more than 200 artworks, but the talks hit a standstill, Bloomberg News reported. The company was also tapping private credit for at least HK$2.8 billion in funding, and then managed to secure HK$300 million from investment firm PAG earlier this year.
--With assistance from Emma Dong.
More stories like this are available on bloomberg.com
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Critical for expansion A senior industry executive familiar with the current movements said, requesting anonymity, that 'the involvement of senior technology specialists from China is critical to expand manufacturing supply chains, since India has not upskilled enough engineers at scale to fully replace the need for foreign partners within the electronics engineering firms." A second industry executive who works with a rival of Rising Stars Hi Tech in India, requesting anonymity, added that 'a lot of specialized machinery that is set up for the first time requires senior executives with technical knowhow from China, since the machine operation interfaces are often proprietary—and also in Chinese." 'This requires specialized training for Indian tech executives to undertake—and subsequently localize these processes to ensure that the licensing fees paid to foreign entities go down each year. But, without hand-holding right now, the localization process will face a significant slowdown," the second executive added. Read more | Dixon is becoming India's Foxconn For the long run, the Centre has rolled out a $2.7-billion components localization incentives scheme for vendors to enter India. Last week, a $12-billion research, development and innovation (RDI) scheme under the Department of Science and Technology (DST) also sought to provide critical electronics makers with long-term concessional loans to build their own machinery and other processes. 'Threats such as giving in to China's pressure of withdrawing technology executives will happen even more frequently, if India does not start ramping-up its licensed technologies and its own patents in the electronics industry. It will also be left open to losing business because of foreign disruptions, and that should be avoided at all costs," said Ajai Chowdhry, industry veteran, and co-founder of HCL and electronics body Epic Foundation.
