A court in Hong Kong has given Chinese property developer Kaisa seven weeks to finalise a debt restructuring plan. Analysts say this could be the group’s last chance.
The High Court adjourned its hearing on a liquidation petition to August 12 after the petitioner representing a key group of bondholders accepted Kaisa’s request for more time.
The Shenzhen-based developer has been working to restructure its offshore debt since defaulting on $12 billion in offshore debt payments in late 2021. At a hearing in April, Kaisa told the court it would finalise terms by the end of May.
ALSO SEE: Deadly Blaze at South Korean Battery Plant Highlights Fire Risks
Justice Peter Ng told the court on Monday he was “not sure if the (next) judge will grant any further adjournment” and that Kaisa “really has no excuse if (there is) no progress”.
Citicorp International, bond trustee of an ad hoc group of bondholders (AHG), has acted as petitioner since March after a former petitioner withdrew.
“There are seven members in the AHG and it takes time to pin down final small details,” Kaisa group senior advisor LL Tam said after the hearing.
The developer hopes to sign an agreement within a fortnight, he said. The deal will involve issuing new shares to creditors, though chairman Kwok Ying Shing will remain top shareholder, Tam said.
The price of Kaisa shares had fallen 5.8% by noon versus a 1% fall in the Hang Seng Mainland Properties Index.
Kaisa is the second-largest offshore debt issuer among Chinese developers after China Evergrande Group but in 2015 became the first among peers to default on dollar bonds.
It is not alone in fighting liquidation, with creditors filing petitions against Country Garden and others. China Evergrande was ordered to liquidate earlier this year.
Chairman Kwok returned to mainland China from Hong Kong for the first time in almost a decade to seek regulatory approval for offshore debt restructuring, Reuters reported last week.
He has been in Shenzhen for about two months for talks with a government committee and onshore regulators, sources said.
Tam said on Monday that Kwok will return to Hong Kong after visiting projects in Shenzhen and ensuring their completion and delivery.
- Reuters with additional editing by Jim Pollard
ALSO SEE:
China’s Property Debts Seen Weighing Down Economy for Years
China’s Property Crisis Slows in 2024 But Downturn Yet to Ease
China Will Favour Developers Who Help the Masses: Minister
Offshore Kaisa Creditors ‘Offer $2bn for Stalled Projects’
China’s Kaisa Inks Strategic Deal with State-Owned Firms
Kaisa Shares Slide as Chinese Developer Delays Earnings
Shimao, Kaisa Among Firms Named as Overdue Payments Surge
China’s Kaisa Seen As Pressured By Officials To Repay Investors
China’s Kaisa May Sell Property Management Unit, HK Sites
