This Monday, a Hong Kong court postponed a hearing to liquidate Kaisa Group Holdings Ltd. to June 24, giving the troubled Chinese developer some breathing room in its debt restructuring plan.
The Shenzhen-based developer has struggled to restructure its offshore debt for two years since defaulting on $12 billion of offshore debt at the end of 2021.
The case before the court involves $750 million of notes unpaid in 2023. Since March, Citicorp International, the trustee of the main creditor group, has served as the petitioner following the withdrawal of the previous applicant.
The reason for the adjournment was not disclosed. A Kaisa spokesperson stated they are in discussions with the creditor group regarding the specific terms of the restructuring plan.
Kaisa's stock surged nearly 6% in early trading in Hong Kong but later gave up most of its gains, closing up 1.3%.
Kaisa is the second-largest issuer of offshore debt among Chinese property developers, second only to China Evergrande Group (HK:3333), and was the first Chinese property developer to default on a dollar bond in 2015.
Earlier this year, a Hong Kong court ordered the liquidation of China Evergrande, while an increasing number of industry companies, including Country Garden, are battling liquidation petitions from creditors.
In March, Kaisa reported a net loss of 19.7 billion yuan ($2.7 billion) for 2023, an increase of about 50% from the previous year's loss. As of the end of last year, its total liabilities stood at 226 billion yuan against total assets of 233 billion yuan.
At that time, the company stated it would continue to push forward with a comprehensive debt restructuring plan as quickly as possible.
Since 2021, China's real estate sector has been grappling with a severe debt crisis, initially triggered by government efforts to curb swelling debt. Since then, numerous developers have defaulted on bond payments, leading to idle construction sites and shaken market confidence.
Over the past two years, a series of government support measures have failed to stop property prices from falling. This month, Beijing announced so-called "historic" measures aimed at clearing inventory and boosting demand from homebuyers.
