Xie Yu
HONG KONG (Reuters) – A Hong Kong court on Monday adjourned a hearing on Kaisa Group’s liquidation petition until June 24, giving the embattled Chinese property developer some respite as it works on a debt restructuring plan.
The Shenzhen-based developer is working to restructure its offshore debt within two years after defaulting on $12 billion of offshore debt at the end of 2021.
The case in court involves the failure to pay 2023 notes with an outstanding principal amount of $750 million. Citicorp International, the trustee of the main group of bondholders, has been the plaintiff since March after the former plaintiff withdrew.
The reason for the postponement was not disclosed. A Kaisa spokesman said they were discussing the specific terms of the restructuring plan with a group of bondholders.
Kaisa shares rose nearly 6% in early trading in Hong Kong on the news, but later gave up much of that gain and were last up 1.3%.
Kaisa is the second largest issuer of offshore debt in China among property developers after China. Evergrande (HK:) Group and became the first Chinese property developer to default on its dollar bonds in 2015.
Earlier this year, a Hong Kong court ordered China Evergrande to liquidate the company, and a growing number of companies in the sector, including Country Garden, are fighting winding-up petitions filed by creditors.
In March, Kaisa reported a net loss of 19.7 billion yuan ($2.7 billion) for 2023, up about 50% from its loss a year earlier. At the end of last year, its total liabilities were 226 billion yuan and total assets were 233 billion yuan.
At the time, the company said it would continue to work to create a comprehensive debt restructuring plan as soon as practicable.
China’s real estate sector has been grappling with a severe debt crisis since 2021, initially caused by government moves to curb rising debt. Since then, dozens of developers have defaulted on bond payments, leaving construction sites idle and damaging confidence in the market.
Waves of government support measures over the past two years have failed to bring down property prices. Beijing this month announced what it called “historic” measures to support the sector, aimed at clearing inventories and boosting demand from home buyers.
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