China’s Kaisa wants to extend the maturity of a $400m offshore bond, shares rise

HONG KONG, Nov. 25 (Reuters) – China’s Kaisa Group Holdings Ltd (1638.HK) said on Thursday it wants to extend the maturity of a $400 million bond by a year and a half – as part of the developer’s efforts to build a ​messy defaulting and solving a liquidity crisis.

In a filing, Kaisa said it would exchange its 6.5% offshore bonds maturing on December 7 for new bonds maturing on June 6, 2023, at the same interest rate that at least 95% of holders will accept.

Kaisa, who has the most foreign debt among Chinese developers after China Evergrande Group (3333.HK), missed coupon payments totaling $88.4 million due on November 11 and 12. The payments have a grace period of 30 days.

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Shares in Kaisa, which resumed trading after the suspension on Nov. 5, rose 18% in afternoon trading, with investors cheering the company’s attempt to resolve payment woes.

Kaisa said a sharp downturn in the funding environment has limited her funding sources to meet upcoming maturities.

“If the swap offer and solicitation are not successfully completed, we may not be able to repay the existing bonds when they mature on December 7, and we may consider alternative debt restructuring exercises,” it said in the filing.

Chinese developers are facing an unprecedented liquidity shortage due to regulatory restrictions on borrowing, triggering a series of foreign debt, credit downgrades and sell-offs of developers’ stocks and bonds.

Kaisa struggles to raise capital by divesting assets, including Hong Kong-listed real estate management unit, Kaisa Prosperity Holdings Ltd (2168.HK).

It recently sold a parcel of land in Hong Kong to a local investor for HK$3.78 billion ($484.82 million), and recovered approximately HK$1.3 billion in cash after paying back the loans it took for the project. land, Reuters reported this week. Kaisa also sells a piece of land in the city.

“Providing solutions and greater clarity to the market is positive; after all, Kaisa’s fundamentals are good, if it succeeds in closing a deal with creditors, it can pay back little by little to get out of this crisis,” Kington said. Lin, director of the Asset Management Department. at Canfield Securities Limited.

The developer said in a separate filing on Wednesday that it wants to accelerate sales of real estate projects and other high-value assets to improve liquidity.

Kaisa, who missed payments on onshore asset management products totaling 1.5 billion yuan ($234.80 million) in October and November, said it has implemented repayment measures for 1.1 billion yuan and is negotiating the rest with investors.

A photo shows the Kaisa Plaza of Kaisa Group Holdings Ltd on a hazy day in Beijing, China, November 5, 2021. REUTERS/Thomas Peter/File photo

The developer also said that “certain members of the group” have failed to meet repayment obligations under financing agreements with bank loans and other loans, and that it is preparing an overall repayment plan.

Other cash-strapped developers, including Evergrande, the world’s most indebted developer who has stumbled from deadline to deadline in recent weeks as it grapples with more than $300 billion in debt, are also negotiating with their creditors and trying to raise money.

“Companies want to buy time, while creditors want to get their money back. Accepting a postponement is better than declaring the companies bankrupt and getting nothing in return,” said Lin.

The onshore unit of Evergrande’s electric vehicle subsidiary (0708.HK) increased its share capital by 39% to $3.5 billion, local media reported Thursday. Hong Kong-listed Evergrande New Energy Vehicle said last week it plans to raise about $347 million through a share offering. read more

Lesser rival Fantasia Holdings (1777.HK) said on Wednesday it reached an agreement with holders of a 1.5 billion yuan onshore bond that matures in 2023 to pay 20% of a coupon due on Thursday and the rest a year later.

However, the media reported that an extension resolution for a new onshore bond maturing in 2023 worth 2.5 billion yuan was not passed on Wednesday.

Fantasia has missed the payment of $205.7 million offshore notes due on Oct. 4.

Separately, rating agency Fitch on Wednesday downgraded China Aoyuan (3883.HK) from “B-” to “CCC-“, reflecting the reduced likelihood of the company’s $688 million offshore bond, which matures in January 2022. , can refinance.

Aoyuan said Monday it has extended the redemption date of onshore asset-backed securities worth 816 million yuan and has engaged Admiralty Harbor Capital Limited and Linklaters as advisors to assess the company’s capital structure and talk to creditors.

Fantasia shares remained flat, while Aoyuan and Evergrande rose 2.3% and 0.7% respectively. The Hang Seng Index (.HSI) was flat.

($1 = 6.3885 Chinese Yuan Renminbi)

($1 = 7.7967 Hong Kong dollars)

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Reporting by Sameer Manekar in Bengaluru and Clare Jim in Hong Kong; Editing by Edwina Gibbs, Christopher Cushing & Simon Cameron-Moore

Our Standards: The Thomson Reuters Trust Principles.

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