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Chinese real estate developer Kaisa announces debt restructuring plan


The City Plaza development of Kaisa Group Holdings Ltd. is under construction in Shanghai, China on Tuesday, November 16, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING – Chinese property developer Kaisa on Thursday announced plans to reimburse investors, temporarily easing concerns over a default as China’s real estate sector continues to face pressure.

Hong Kong-listed Kaisa shares jumped 20% in the open market, before slashing some gains. It was the first day of listing after a hiatus of almost three weeks. The developer had suspended trading after missing a payment on a wealth management product earlier this month.

“Repayment measures have been implemented” for about 1.1 billion yuan ($ 171.9 million) of wealth management products, Kaisa said in a document filed with the Hong Kong Stock Exchange. The developer said it was in negotiations to repay the remaining 396.6 million yuan in wealth management products.

Separately, Kaisa said he would restructure the offshore debt payments due in December by offering investors new bonds worth $ 380 million which are now due in 2023. The original bonds denominated in US dollars were worth $ 400 million.

Among Chinese developers, Kaisa is the second-largest issuer of offshore high-yield bonds denominated in US dollars, according to French investment bank Natixis. Evergrande, the most indebted real estate developer in the world, ranks first.

In the first half of this year, Kaisa had crossed two of China’s three “red lines” for real estate developers that the government has defined, according to Natixis.

“The continued tightening of government policy, multiple credit events and deteriorating consumer confidence have resulted in the temporary closure of various refinancing platforms for the sector and put enormous pressure on our short-term liquidity,” said Kaisa on a Thursday file.

“Despite our efforts to reduce our interest-bearing debt in response to government regulations, the current sharp decline in the funding environment has limited our sources of funding to meet upcoming maturities,” the company said.

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