Sunac Said to Consider Buying Stake in Troubled Developer Kaisa

Sunac China Holdings Ltd. is in talks to purchase a stake in Kaisa Group Holdings Ltd. as the Shenzhen government seeks investors for the troubled developer, according to a person familiar with the matter.

Sunac has sent a team to Shenzhen, where Kaisa is based, to speak with authorities and carry out due diligence, according to the person, who asked not to be identified because the talks haven’t been made public. While Sunac is seeking to control Kaisa, Shenzhen wants it to partner with state-owned enterprises for the acquisition, the person said.

Selling a stake to Sunac could ease pressure on Kaisa, which is in the middle of a 30-day grace period after failing to make a $23 million coupon payment, due Jan. 8, on its $500 million of 2020 dollar bonds. Shenzhen is in talks with several developers to take stakes in Kaisa, which is also being probed over its alleged links to a former Shenzhen official who is the target of a graft investigation, according to people familiar with the matter.

Sunac’s involvement was reported earlier today by QQ.com. Phone calls to Sunac’s Tianjin-based press office went unanswered. Kaisa spokeswoman Zhou Ting declined to comment when reached by Bloomberg News. An official who answered the phone at Shenzhen government’s media office said he wasn’t familiar with the matter.

Sunac’s cash on hand was boosted to about 20 billion yuan ($3.2 billion) at the end of 2014 after its planned acquisition of a 24 percent stake in Greentown China Holdings Ltd. was terminated, according to Haitong International Securities Co.

— With assistance by Steven Yang, and Dingmin Zhang

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