The Chinese real estate group Kaisa has suspended trading of its securities on the Hong Kong Stock Exchange: the company that manages the listing in the former British colony reports. Kaisa, struggling with a financial crisis, announced the bankruptcy of the $ 380 million debt swap last week. A group of creditors, however, would ultimately send out an offer that would see the company avoid formal default on $ 400 million of maturing bonds in order to have more research time to seek solutions.
Kaisa, the 27th largest real estate company in China, is the latest player in the sector to scare investors in the wake of the huge debt accumulated. Before the start of trading, the company announced the suspension of trading on securities in Hong Kong “pending the release of an announcement containing inside information”.
Plan to delay refund offers fails
In November, Kaisa unveiled a plan to delay repayment times for some of its bonds, offering a $ 380 million swap that would have given him more leeway to find more resources. The proposal, however, did not get the necessary approval from 95% of bondholders for its green light, making the scenarios particularly tough. A group of creditors reportedly sent an offer this week that would see the company avoid formal default on $ 400 million of maturing bonds in order to have more time to seek solutions.
The Chinese government has triggered a crisis in the real estate sector since it launched a campaign to curb excessive debt and the speculative bubble last year. Companies that had piled up huge debts to expand suddenly ran into severe funding difficulties, starting to run into cash problems to complete projects, pay suppliers and meet repayments.