Kaisa Group Holdings Ltd., the Chinese developer in the midst of a protracted debt restructuring, plans to resume sales at three property projects in Shenzhen as early as this month, promising to ease its financial woes.
Kaisa is in talks with creditors to resolve sales that have been blocked at Kaisa City Plaza, Yuefeng Garden and Qianhai Plaza, Tam Lai Ling, a senior adviser and former Kaisa vice chairman, said in a phone interview Wednesday.
The company hopes to sign a framework agreement with an onshore creditor committee this week or next to push forward its debt restructuring, he said.
The resumption of sales will help ease a liquidity crunch at Kaisa after the Shenzhen government blocked sales of its local projects late last year amid an anti-corruption probe, forcing the developer to seek the debt restructuring with creditors. Sunac China Holdings Ltd. dropped a planned acquisition of the company in May after finding Kaisa’s net asset value was zero, Sunac Chairman Sun Hongbin said June 18.
“We haven’t sold projects in Shenzhen for a long time,” Tam said. “The framework is just an agreement in principle about coordinating and pushing forward onshore debt restructuring. We still need to talk to each bank on detailed terms after that.”
Kaisa’s $800 million of 8.875 percent 2018 notes gained 0.56 cent to 49.78 cents on the dollar as of 11:31 a.m. in Hong Kong, according to Bloomberg-compiled prices. Its $500 million of 10.25 percent 2020 notes climbed 0.81 cent to 50.03 cents. Both securities traded at their highest levels since July 7.
Kaisa’s shares have been suspended from trading in Hong Kong since March 31, the same day the company postponed the release of its 2014 results to give auditors more time to verify its accounts.
Most of the government-imposed restrictions were lifted in April, however courts are preventing sales after creditors sued the developer, Kaisa, which is based in the southern Chinese city, said then.
— With assistance by Moxy Ying, and Dingmin Zhang