Another Chinese Real Estate Giant Misses Key Bond Payment, Raising Further Concerns In The Property Market

Shares of another Chinese developer were suspended from trading after it failed to service a payment deadline, and this exasperated the already precarious real estate market of the second-largest economy of the world.

The Hong Kong Stock Exchange suspended trading in stocks of Kaisa Group Holdings and three of its subsidiaries on Friday following the company failing to honor payment on a wealth management product (WMP) the previous day.

The uninsured short-term notes sold in China are known as WMPs.

The firm was suffering “unprecedented strain on its liquidity”, admitted Kwok Ying-Shing, the Shenzhen-based homebuilder’s CEO.

The finance department of the company has said that it was taking a number of initiatives, including hastening the sale of its assets, in order to make the required payment.

It has been reported that Kaisa is planning to sell off 18 of its assets in Shenzhen, primarily assets in retail and commercial properties, for a total of 81.8 billion yuan by the end of 2022.

Trading in its shares pending the revelation of “inside information,”, the company said in a filing on Friday but did not provide any further details.

By that time, however, there was significant damage to the share price of the company since the emergence of the news about it missing payment.

On Thursday, the stock dropped 15%.

The Kaisa problem is the latest in a string of financial crises and missed payments among China’s real estate enterprises, which are grappling with debt and stricter standards. Evergrande, China’s second-largest developer, has previously had investors on edge with its £217 billion debt, which it is battling to decrease.

Evergrande nearly avoided default for the second time last week by paying off its obligations on offshore debts before the grace period expired. Another deadline is looming on November 10th.

Last month, another Chinese developer, Modern Land, was unable to service its bond coupon payments.

Kaisa also has around £2.3 billion of offshore senior notes due in the next 12 months, with coupon payments totaling £43 million due on November 11 and 12.

(Adapted from Independent.co.uk)



Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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