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Property

Chinese tycoon scrambles to hold Goldin empire together

Pan Sutong pledges stake as company fights creditors for headquarters

Pan Sutong, third from right, has been a high-profile presence at the Hong Kong Jockey Club.   © Getty Images

HONG KONG -- Chinese tycoon Pan Sutong is rushing to raise funds to hold onto what remains of the once-grand business empire he built spanning property, consumer electronics, financial services and wine.

Shares of Goldin Financial Holdings, the horse and wine enthusiast's surviving listed company in Hong Kong, climbed 21.2% to HK$1.20 on Friday after the company announced that a top lieutenant of Li Ka-shing, founder of CK Hutchison Holdings, would assume the post of vice chairman to provide "financial and restructuring advice."

Goldin Financial also said it had reached a new agreement to sell off a showcase plot.

Hong Kong investors took the appointment of Ma Lai-chee as a sign Li might rescue the company, though a CK spokesperson said only that "we will actively study Goldin's financial condition and liabilities."

In a separate filing, Goldin Financial disclosed that a pending deal under which it would have sold a large lot on the site of Hong Kong's former Kai Tak airport to an undisclosed buyer had collapsed but been replaced by a new deal with another buyer who had already given Goldin 2.5 billion Hong Kong dollars ($322.53 million) in cash up front.

Goldin had been the surprise winner of the site and others at the airfield at government auctions. Its stock reached a peak of HK$34.20 when the company was riding high in 2015.

Pan has also been personally raising funds in recent days. According to a notice filed with the Stock Exchange of Hong Kong, he pledged a 28.2% share of his 70.9% sake in Goldin Financial to the Macao subsidiary of Industrial & Commercial Bank of China last week as security for a loan. Local media reported this week that Pan remortgaged his luxury mansion in Hong Kong's Deep Water Bay neighborhood, also home to Li, for additional funds.

Goldin Financial last week disclosed that it had gone to court to contest the seizure of its 27-story headquarters in Kowloon Bay by creditors in relation to an outstanding HK$6.8 billion debt. The company is contesting the appointment of a receiver to hold onto the office tower, which the company said is worth between HK$15 billion and HK$16.5 billion.

Goldin Financial's latest earnings show the mounting financial pressure it is under. In the second half of last year, its cash and pledged bank deposits declined 39.7% to HK$2.5 billion from six months' previous while it posted a loss of HK$478.2 million, reversing a net profit of HK$742.4 million a year before. The company cited higher financing costs and weak property sales due to anti-government protests in Hong Kong.

Within mainland China, the Goldin Group may be best known as the developer of Goldin Finance 117, a 597-meter skyscraper in the northern city of Tianjin. While the company intended to crown the building by 2017 as China's tallest, it remains unfinished and has been overtaken in height by others.

Pan has come down from great heights too. In 2015, Pan lost about $13.4 billion of his wealth in one day after the share price of Goldin Financial and its then-sister company Goldin Properties Holdings, since privatized, each fell more than 40%. Their prices had multiplied repeatedly over the previous year, taking his ranking on Forbes' billionaire list to as high as No. 21.

As of Friday, the 57-year-old tycoon's ranking was No. 437, with an assessed net worth of $4 billion.

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