Troubled CEFC's $3.2 Billion Property Portfolio Up for Sale

(Bloomberg) -- CEFC China Energy Co., the sprawling conglomerate that's come under increasing government scrutiny, plans to sell its entire global property portfolio with a book value of more than 20 billion yuan ($3.2 billion), according to people with knowledge of the matter.

Almost 100 properties are up for sale, including its headquarters in an upscale Shanghai neighborhood, four floors of the Hong Kong Convention & Exhibition Centre and a condominium at the Trump World Tower in Manhattan, as well as hotels, residential apartments and industrial facilities, said the people, asking not to be identified because the deliberations haven't been publicly disclosed. The properties, mostly located in big Chinese cities, include a smattering of developments overseas, the people said.

CEFC didn't respond to emailed requests for comment.

The firm joins a group of erstwhile acquisitive Chinese companies, including HNA Group Co. and Anbang Insurance Group Co., that have sold or are under pressure to sell holdings after coming under scrutiny amid President Xi Jinping's crackdown on outbound deals and excessive debt.

CEFC rose from relative obscurity in recent years through increasingly ambitious energy and finance deals across Eastern Europe, the Middle East and Russia. Its troubles started not long after its biggest catch -- an agreement in September to buy a $9 billion stake in Russian state energy giant Rosneft PJSC -- sparked greater curiosity about the company, as well as its private and enigmatic chairman, Ye Jianming.

Signs have emerged recently that it's unable to repay some debts and is seeking to sell at least one unit. The company's creditors, led by China Development Bank, have formed a committee to review asset disposals, people familiar with the matter said this week, adding that the Shanghai government has taken control of the firm. Ye, who started the company in 2002, was said earlier this month to have been investigated by authorities and will step down from management.

The properties on the block include the Shanghai Tomorrow Tower, where most the company's offices located, and multiple villas and high-end apartments across China, the people said. Overseas properties in the Czech Republic and Georgia are also included. CEFC has pledged some properties to raise funds equivalent to almost two-thirds of their total value.

Meanwhile, HNA is selling assets in China and around the world in a reversal of a buying spree, as it scrambles to repay its debts. Chinese authorities last month temporarily seized Anbang and a government-appointed takeover team will formulate detailed plans for the insurer, including the potential sale of assets. Anbang has said it is “fully committed” to its overseas investments.

To contact Bloomberg News staff for this story: Alfred Cang in Singapore at acang@bloomberg.net, Heng Xie in Beijing at hxie34@bloomberg.net, Emma Dong in Shanghai at edong10@bloomberg.net.

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Jessica Zhou at jzhou75@bloomberg.net, Ramsey Al-Rikabi, Jasmine Ng

©2018 Bloomberg L.P.

With assistance from Alfred Cang, Heng Xie, Emma Dong