Kardan: How Much of Dalian’s Value Can Really Move Up to the Parent by December 2026?
This follow-up isolates the gap between Galleria Dalian’s appraised value and the cash that can realistically reach Kardan by December 2026. After the project loan, a short-time sale discount, taxes, selling costs, and syndicate restrictions, the parent-level amount is far smaller than the EUR 96.2 million headline.
What This Follow-up Is Isolating
The main article already established that Galleria Dalian is the key asset left in Kardan, but also that its value does not flow one-for-one to shareholders or bondholders. This follow-up isolates the actual bottleneck: not what the mall is worth on paper, but how much of that value can realistically reach the parent by December 31, 2026.
The short answer is that it is not EUR 96.2 million. That number is an asset-level valuation before selling costs and taxes. On the way up, the cash first meets the project lender, then the syndicate’s upstream restrictions, and only after that does it reach Kardan at the parent level.
That distinction matters now because the clock is no longer about long-dated theoretical value. It is about a hard deadline: December 31, 2026. That is both the date by which the company says it will not have enough resources to fully repay the bonds, and the date by which it says there is no certainty it can actually sell Galleria Dalian. This is no longer a NAV discussion. It is a question of accessible cash in time.
The Property Value Is a Starting Point, Not the Answer
The valuer puts Galleria Dalian at RMB 792 million, or EUR 96.2 million. But the same valuation also makes two points that immediately narrow the relevant number:
- The figure is Market Value at the asset level, without selling or purchase costs and without offsetting taxes.
- If the property is disposed of within 12 months, the valuer expects a 20% to 35% discount.
That changes the framing completely. If the short-time discount is applied to the property value, gross proceeds are no longer EUR 96.2 million. They fall to about EUR 77.0 million at a 20% discount and EUR 62.5 million at a 35% discount.
But even that is still not parent cash, because the project loan gets paid first. As of December 31, 2025, the project loan stood at about RMB 366.5 million, or about EUR 44.5 million. So even on a simple and generous bridge, before taxes, selling costs, and possible prepayment penalties, the residual looks like this:
| Step | No short-time discount | Sale at 20% discount | Sale at 35% discount |
|---|---|---|---|
| Property value or gross sale proceeds | 96.2 | 77.0 | 62.5 |
| Less: project loan | 44.5 | 44.5 | 44.5 |
| Residual before taxes, selling costs, and penalties | 51.7 | 32.5 | 18.0 |
Even this table is generous. In its own cash flow forecast, the company says the net amount from a sale of Galleria Dalian is calculated as the valuation less the project loan, including principal and forecast accrued interest through the original repayment date, but without capital gains tax, without selling expenses, and without possible loan prepayment penalties if they apply. In other words, even EUR 51.7 million is not “what reaches Kardan.” It is a ceiling before more leakage.
The Bank Sits Ahead of the Parent
This is where the story turns from valuation into capital structure. In May 2025, the project loan was refinanced through a syndicate led by Bank of Communications with Yingkou joining. The loan was spread over 15 years, but the lender package is tight:
| Constraint | What the note says | Why it matters for upstream cash |
|---|---|---|
| Collateral | The mall and the project company shares are pledged, alongside group undertakings and guarantees | The cash meets the asset-level lender before it reaches Kardan |
| Cash reserve | The project company must keep cash at no less than 1.2x the next six months of debt service, quantified at RMB 21.5 million to RMB 25.1 million | Not all cash is freely distributable even after a sale or operating inflow |
| Upstream approval | Any transfer of funds to the company is subject to syndicate approval | Economic residual is not the same thing as cash that can actually move up |
| Value or market deterioration | The bank may demand additional collateral or guarantees, require early repayment, or seek to change the rate, amount, or term of the loan | In the exact scenario where a pressured sale happens, restrictions can tighten rather than ease |
This is the core point. Even if the asset is sold, and even if some value remains after the loan, the cash is still not free. It is subject to syndicate approval, a minimum cash reserve, and lender rights that can become stricter if value or market conditions weaken.
That is also why the bondholders’ collateral at the parent level does not solve the problem. The trust deeds pledge shares and loans of TGI, GTC RE, and KLC, along with certain bank accounts. But that pledge sits above the project-level lender. If the Chinese bank gets paid first, the parent-level bond collateral does not create new cash. It only gives a claim on what is left afterward.
December 2026 Exposes That the Gap Is Cash, Not Accounting
There are two very different bond numbers in the report, and the gap between them matters.
The first number is the accounting balance. The bonds are carried at EUR 115.0 million as of December 31, 2025.
The second number is the cash maturity wall. In the liquidity table, contractual bond cash flows falling due within 6 to 12 months amount to EUR 324.8 million.
That is not a mistake. It reflects the accounting treatment that followed the December 2024 restructuring. On the balance sheet, the bonds sit at a lower carrying value. But from a liquidity perspective, December 2026 is still a very large cash deadline. Anyone looking only at the EUR 115 million in note 18 misses the real question: how much cash has to arrive in practice, and by when.
That is also where the internal tension in the filing becomes visible:
- On one hand, the 2026 cash flow forecast includes EUR 60.0 million from asset realization and EUR 59.0 million of bond principal and interest payment.
- On the other hand, the company states explicitly that it will not have enough amounts to fully repay its bond obligations by December 31, 2026.
The right reading is that Kardan is not presenting a full solution here. It is presenting a partial bridge built around the sale of its main asset, and even that bridge rests on three aggressive assumptions:
- that the sale closes on time,
- that proceeds remain close enough to appraisal,
- that leakage between the asset level and the parent remains manageable.
But the filing itself undercuts all three. It says there is no certainty of a sale by the deadline, the valuer warns of a 20% to 35% discount for a sale within 12 months, and the loan note makes any upstream transfer subject to syndicate approval.
So How Much Can Really Move Up?
If the question is asked in a hard-nosed way, the answer as of December 31, 2025 looks like this:
- Not EUR 96.2 million: that is the gross asset value.
- Not EUR 60 million: that is the company’s forecast bridge before taxes, selling costs, and possible penalties.
- In a generous mechanical case: about EUR 51.7 million remains after the project loan, before further leakage.
- In a sale within 12 months using the valuer’s own discount range: the residual drops to about EUR 18.0 million to EUR 32.5 million before taxes, selling costs, and penalties.
- At the parent level in practice: the amount can be lower, because moving funds up is subject to syndicate approval and minimum cash retention.
So anyone asking “how much of Dalian’s value can really move up to the parent by December 2026” should start from a range that sits below roughly EUR 51.7 million, not from the EUR 96.2 million headline. In a pressured sale scenario, that range can shrink sharply.
Bottom Line
The number that matters here is not the mall’s value. It is the mall’s value after everyone ahead of Kardan gets paid first. The project loan principal alone takes out EUR 44.5 million immediately. A sale within 12 months can remove another EUR 19.2 million to EUR 33.7 million from gross value. After that, taxes, selling costs, possible penalties, and syndicate approval still stand in the way.
Dalian can still be Kardan’s main cash source. But it can no longer be described as a clean solution. By December 31, 2026, it looks more like an asset that may buy partial time than an asset that solves the bond wall on its own.
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