China’s Kaisa seeks to extend maturity on $400 mln offshore bond, shares surge

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HONG KONG, Nov 25 (Reuters) – China’s Kaisa Group Holdings Ltd (1638.HK) stated on Thursday it desires to extend the maturity of a $400 million bond by a 12 months and a half – a part of the property developer’s efforts to keep away from a messy default and resolve a liquidity disaster.

In a submitting, Kaisa stated it could alternate its 6.5% offshore bonds due Dec. 7 for brand spanking new notes due June 6, 2023, on the identical rate of interest if at the very least 95% of holders settle for.

Kaisa, which has probably the most offshore debt amongst Chinese builders after China Evergrande Group (3333.HK), missed coupon funds totalling $88.4 million due on Nov. 11 and 12. The funds have a 30-day grace interval.

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Shares in Kaisa, which resumed buying and selling after suspension on Nov. 5, have been up 18% in afternoon commerce with traders cheered by the agency’s try to resolve fee issues.

Kaisa stated a pointy downturn within the financing setting has restricted its funding sources to meet upcoming maturities.

“If the exchange offer and consent solicitation are not successfully consummated, we may not be able to repay the existing notes upon maturity on Dec. 7, and we may consider alternative debt restructuring exercise,” it stated within the submitting.

Chinese builders are dealing with an unprecedented liquidity squeeze due to regulatory curbs on borrowing, inflicting a string of offshore debt default, credit-rating downgrades and sell-offs in builders’ shares and bonds.

Kaisa has been scrambling to elevate capital by divesting belongings together with Hong Kong-listed property administration unit, Kaisa Prosperity Holdings Ltd (2168.HK).

It not too long ago offered a land parcel in Hong Kong to an area investor for HK$3.78 billion ($484.82 million), recovering round HK$1.3 billion money after repaying the loans it borrowed for the land, Reuters reported this week. Kaisa can be promoting one other land plot within the metropolis.

“Providing solutions and more clarity to the market is positive; afterall Kaisa’s fundamentals are good, if it manages to strike a deal with creditors it can repay bit by bit to get past this crisis,” stated Kington Lin, managing director of Asset Management Department at Canfield Securities Limited.

The developer, in a separate submitting late on Wednesday, stated it goals to speed up the disposal of actual property initiatives and different high-quality belongings to enhance liquidity.

Having missed funds on onshore wealth administration merchandise totalling 1.5 billion yuan ($234.80 million) due in October and November, Kaisa stated it carried out reimbursement measures for 1.1 billion yuan and is negotiating the rest with traders.

The developer additionally stated “certain members of the group” didn’t meet reimbursement obligations underneath finance agreements involving financial institution loans and different borrowing, and that it’s formulating an total reimbursement plan.

Other cash-strapped builders together with Evergrande, the world’s most indebted developer which has been stumbling from deadline to deadline in current weeks because it grapples with greater than $300 billion in liabilities, are additionally negotiating with their collectors and scrambling to elevate funds.

“Companies want to buy time, while creditors want to recover their money. Accepting an extension is better than calling the companies bankruptcy and get nothing back,” stated Lin.

Evergrande electrical car (EV) subsidiary’s (0708.HK) onshore unit raised its registered capital by 39% to $3.5 billion, native media reported on Thursday. The Hong Kong-listed Evergrande New Energy Vehicle stated final week that it deliberate to elevate round $347 million by a share placement. learn extra

Smaller rival Fantasia Holdings (1777.HK) stated on Wednesday it has reached an settlement with holders of a 1.5 billion yuan onshore bond maturing in 2023 to pay 20% of a coupon due on Thursday and the remainder a 12 months later.

But, media reported, that an extension decision for an additional onshore bond due 2023 value 2.5 billion yuan failed to go on Wednesday.

Fantasia has missed fee of $205.7 million offshore notes that have been due Oct. 4.

Separately, Rating company Fitch downgraded on Wednesday China Aoyuan’s (3883.HK) credit standing to “CCC-” from “B-“, reflecting the decreased probabilities that the agency shall be ready to refinance its $688 million offshore bond due January 2022.

Aoyuan stated on Monday it has prolonged the redemption date of onshore asset-backed securities value 816 million yuan and engaged Admiralty Harbour Capital Limited and Linklaters as advisers to assess the corporate’s capital construction and discuss to collectors.

Shares of Fantasia have been flat, whereas Aoyuan and Evergrande edged up 2.3% and 0.7%, respectively. 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

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

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