(Yicai Global) June 26 -- CK Asset Holding, a Chinese property developer founded by Hong Kong business magnate Li Ka-shing, is trying to gain control of a luxury housing project in Hong Kong worth about HKD33.7 billion (USD4.3 billion), according to sources.

CK Asset is in talks with HSBC to acquire the CNY10.2 billion (USD1.4 billion) loan a bank syndicate which includes the UK lender issued to KWG Group Holdings and Logan Group, two Chinese mainland property developers, for The Corniche luxury residential project in Hong Kong, sources told Yicai Global. The Hong Kong-based firm has not yet confirmed the news.

In 2017, a consortium of KWG and Logan paid HKD16.9 billion for a piece of land on Hong Kong’s Aberdeen Island. The 295 coastal apartments built by the two developers went on sale in January for HKD33.7 billion, based on a sales area of over 673,000 square feet and a unit price of HKD50,000 (USD6,385) per sqft.

KWG and Logan defaulted on offshore debts in May and last August, respectively, because of the sluggish property sector. The two firms are advancing debt restructuring schemes that include The Corniche’s loan.

By purchasing the loan, CK Asset may obtain a stake in the project after further negotiations with KWG and Logan, an industry insider told Yicai Global. While the acquisition would be legal, it may go against business ethics because CK Asset would take advantage of the developers’ misfortune, the person noted.

The main concern of KWG and Logan is that CK Asset’s participation will probably veer their efforts to restructure offshore debts, impacting their operations and eventually leading to failures to deliver other projects on time, the industry insider added.

Editors: Dou Shicong, Futura Costaglione