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Tunhua Road landmark building to be auctioned

A Taipei landmark, the Hung Kuo Building, may be auctioned off to pay the debts of the financially troubled Hung Kuo Group. PHOTO: CHEN CHENG-CHAN, TAIPEI TIMES

The financially troubled Hung Kuo Group (宏國集團) may lose a major landmark building in Taipei City as a lender prepares to auction it to claim the debts owed by the group, the Chinese-language media reported yesterday.

Hung Kuo has failed to service its debts for six months in a row, according to the report.

The auction plan -- spurred on by United World Chinese Commercial Bank (世華銀行) -- may prompt other creditors to follow suit.

Hung Kuo reached an agreement with creditor banks in November last year to have its debts rolled over. The agreement set a 6 percent interest rate over a period of two years, of which the agreement requires cash payment of 1.5 percent over the first six months, and 3 percent over the second six months. The rest of the interest was to be paid at a future date.

Hung Kuo spokesman Tu Shan-ping (杜善平) denied any knowledge of the bank's plan, but the report also quoted an unnamed Hung Kuo manager as saying the auction may not enable the bank to claim its credit in full, given that the building is not likely to fetch a good price with Taiwan's real estate market in the gutter.

Scheduled for auction: * The unique-shaped building is worth an estimated NT$12 billion. * It currently houses a number of foreign banks and Hung Kuo receives more than NT$50 million monthly from the tenants. Source: Taipei Times

The unique-shaped building, located on the corner of Tunhua North Road and Changchun Road, stands on a 20,000 ping (66,000m2) tract of land and is worth an estimated NT$12 billion.

The building currently houses a number of foreign banks and Hung Kuo receives more than NT$50 million monthly from the tenants.

Hung Kuo is also negotiating with potential buyers interested in taking over the Lai Lai Sheraton Hotel, another valuable asset which the group wants to sell at NT$5.5 billion, the report said.
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