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Hong Kong court grants Chinese property developer extra time to negotiate with bondholders
(MENAFN) HONG KONG — On Monday, a Hong Kong court granted troubled Chinese property developer Kaisa an additional four weeks to negotiate with bondholders on a viable debt restructuring plan. This extension, granted by Judge Anthony Chan, postpones proceedings until September 9, following an agreement between Kaisa and its creditors.
Kaisa, headquartered in Shenzhen, ranks as the second-largest issuer of offshore bonds among Chinese developers, trailing only behind Evergrande. The company first defaulted on its debt in 2021 amidst the broader turmoil within China's property sector, which has struggled to recover from Beijing's 2020 crackdown on excessive borrowing and speculative practices.
The developer's financial situation remains dire, with total liabilities reported at 226 billion yuan (approximately USD32 billion) at the end of the previous year. At a June court session, Kaisa disclosed that approximately USD13 billion of this debt was under restructuring.
Lawyer Eva Sit, representing the bondholders, expressed optimism that the adjournment would allow the parties to finalize an agreement. However, she noted that the court had previously cautioned Kaisa about the need for substantial progress, with no guarantee of further extensions if negotiations faltered.
The winding-up petition against Kaisa, filed last July, underscores the challenges faced by many Chinese developers as they navigate the aftermath of a stringent regulatory environment and ongoing financial difficulties.
Kaisa, headquartered in Shenzhen, ranks as the second-largest issuer of offshore bonds among Chinese developers, trailing only behind Evergrande. The company first defaulted on its debt in 2021 amidst the broader turmoil within China's property sector, which has struggled to recover from Beijing's 2020 crackdown on excessive borrowing and speculative practices.
The developer's financial situation remains dire, with total liabilities reported at 226 billion yuan (approximately USD32 billion) at the end of the previous year. At a June court session, Kaisa disclosed that approximately USD13 billion of this debt was under restructuring.
Lawyer Eva Sit, representing the bondholders, expressed optimism that the adjournment would allow the parties to finalize an agreement. However, she noted that the court had previously cautioned Kaisa about the need for substantial progress, with no guarantee of further extensions if negotiations faltered.
The winding-up petition against Kaisa, filed last July, underscores the challenges faced by many Chinese developers as they navigate the aftermath of a stringent regulatory environment and ongoing financial difficulties.
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