A major Chinese bank is suing the developer of a halted high-rise project in Los Angeles amid a string of financial problems for the real estate company in recent years.
China Minsheng Bank alleges that Wuhan Centre Company and Wuhan CBD Company, related to Beijing-based developer Oceanwide Holdings, failed a repayment obligation related to loans valued at more than $1 billion, according to a filing with the Hong Kong Stock Exchange. The loan is guaranteed by Oceanwide Holdings and Lu Zhiqiang, a billionaire who is the controller of Oceanwide Holdings, according to the financial newspaper Nikkei Asia.
The lawsuit attempts to force Wuhan Centre Company and Wuhan CBD Company to repay the loan's principal amount, according to the filing. The loan is secured by "five pieces of land under the name of Wuhan CBD Company and guaranteed by Oceanwide Holding and Lu Zhiqiang," according to the filing.
A representative for China Oceanwide USA, the U.S. development arm of Oceanwide Holdings, did not respond to a request to comment from CoStar News.
The Chinese developer halted construction in October 2020 on its multi-tower, billion-dollar development in downtown Los Angeles after running out of cash. Since then, the developer has been meeting with groups of investors and financing institutions to restart work on the project called Oceanwide Plaza. In addition, the developer said it would entertain offers to sell the property but the price for the real estate is not known to CoStar News.
In November, construction cranes were taken down at the unfinished Oceanwide Plaza development in another setback for resuming construction. A person familiar with the action told CoStar News at the time that the developer remained committed to completing the project.
The China-based developer said it has already injected roughly $1.2 billion into the project's construction, and one development expert told CoStar News in November another $1 billion is needed to finish the job.
Oceanwide Plaza was to feature upscale condominiums, a five-star hotel, a shopping mall, and the largest LED signage on the West Coast.
China Minsheng Bank is listed at No. 239 on Forbes Global 2000, which ranks the world's largest companies.