China City Construction’s Brickell property could remain an open pit for a bit longer as the company deals with liquidity issues and a lawsuit.
The Brickell property is 55% owned by China City Construction (International) Company Ltd of Hong Kong, which itself is a subsidiary of mainland China based China City Construction Holding Group, a state-owned company.
In 2016, the Hong Kong company defaulted on bonds, triggered by the mainland parent company switching to a private ownership structure.
The mainland company has since reverted back to state ownership, but is now itself facing severe liquidity issues in a domino effect.
As part of a proposed restructuring, China City announced last month that its stake in the Brickell property could be transferred to creditors.
China City is also facing a lawsuit in Hong Kong over a 2015 sale of a stake in the Brickell property. In that sale, a subsidiary of Chun Wo Holdings (now Asia Allied Infrastructure) paid $40.5 million for a 45% share.
As part of the deal, the partners were required to have agreed on an EB5 financing plan by the end of 1Q 2017. The contract requires China City to repurchase the stake after failing to finalize the deal, the lawsuit claims.