Kaisa Group Holdings: Kaisa Suspends Operations Amid Debt Repayment Uncertainty
The suspension comes after a source with direct knowledge of the matter said Kaisa was unlikely to meet its $400 million offshore debt deadline on Tuesday.
Nonpayment by Kaisa would push the 6.5% bond of Kaisa, the largest Chinese holder of offshore debt among developers after Evergrande, into technical default, triggering cross-defaults on its offshore bonds totaling nearly $12 billion. of dollars.
To avoid default, bondholders holding more than 50% of notes due on Dec. 7 and Kaisa notes worth a total of $5 billion sent the company draft forbearance terms. Monday evening, said a separate source with direct knowledge of the matter.
Even in the event of a technical failure, Kaisa and offshore bondholders could discuss forbearance terms, two sources with knowledge of the matter said.
Kaisa, whose shares rose 1.1% on Tuesday, said he was open to discussing abstention, without giving further details.
Arch-rival China Evergrande also failed to make payments on some U.S. dollar bonds at the end of a month-long grace period, sources familiar with the matter told Reuters on Tuesday, paving the way for a massive default from the world’s most indebted property developer.