Shares of Chinese real estate developer Kaisa pop 20% after debt restructuring plan

Kaisa Group Holdings Ltd.’s City Plaza growth underneath building in Shanghai, China, on Tuesday, Nov. 16, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING — Chinese real estate developer Kaisa introduced Thursday plans for paying again traders, quickly assuaging considerations a few default as China’s property sector continues to face strain.

Kaisa’s Hong Kong-listed shares popped 20% out there open, earlier than paring some positive aspects. It was the primary day of buying and selling after a virtually three-week halt. The developer had suspended buying and selling after missing a payment on a wealth management product earlier this month.

“Repayment measures have been applied” for about 1.1 billion yuan ($171.9 million) of the wealth administration merchandise, Kaisa mentioned in a submitting with the Hong Kong inventory trade. The developer mentioned it is in negotiations about compensation of the remaining 396.6 million yuan in wealth administration merchandise.

Separately, Kaisa mentioned it will restructure offshore debt funds due in December by providing traders new bonds value $380 million that are actually due in 2023. The authentic U.S. dollar-denominated bonds had been value $400 million.

Among Chinese builders, Kaisa is the second-largest issuer of U.S. dollar-denominated offshore high-yield bonds, in keeping with French funding financial institution Natixis. Evergrande, the world’s most indebted real estate developer, ranks first.

As of the primary half of this 12 months, Kaisa had crossed two of China’s three “purple traces” for real estate builders that the federal government outlined, in keeping with Natixis.

“Persistent tightening governmental coverage, a number of credit score occasions and deteriorating shopper sentiment have resulted in non permanent shut-down of numerous refinancing venues for the sector and put huge strain on our short-term liquidity,” Kaisa mentioned in a submitting Thursday.

“Despite our efforts to scale back our interest-bearing debt in response to authorities rules, the present sharp downturn within the financing surroundings has restricted our funding sources to handle the upcoming maturities,” the corporate mentioned.

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