Saturday, August 20, 2022

Property firm Kaisa suspends share trading in Hong Kong


Kaisa became the latest company to spook investors when it announced on Friday that it had failed in a bid for a debt swap that would buy it crucial time

Chinese property firm Kaisa suspended share trading in Hong Kong on Wednesday as questions swirl over its ability to make repayments and contagion spreads within the country’s debt-ridden real estate sector.

The Chinese government sparked a crisis within the property industry when it launched a drive last year to curb excessive debt among real estate firms as well as rampant consumer speculation.

Kaisa, China’s 27th-largest real estate firm in terms of sales but one of its most indebted, became the latest company to spook investors when it announced on Friday that it had failed in a bid for a debt swap that would buy it crucial time.

On Wednesday morning the firm announced it was suspending trading in Hong Kong, where it is listed, ‘pending the release by the Company of an announcement containing inside information’.

It is the second time the company has suspended trading in the last month.

Kaisa last month announced a plan to delay the repayment timeline for some of its bonds, offering an exchange for at least $380 million of notes, which would have given it some room to find money further down the line.

But the offer failed to win the 95 percent approval from bondholders needed for the plan to go ahead.

The company currently has some $11.6 billion of dollar notes outstanding. It previously defaulted on a dollar debt in 2015, becoming the first Chinese developer to do so.

The most indebted Chinese property firm is Evergrande, which set off the current confidence crisis earlier in the summer.

The Shenzhen-based company racked up $300 billion in loans before Beijing began to rein in the sector.


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