Chinese property developer Kaisa says several bank accounts frozen, creditors seek repayment

HONG KONG (Reuters) - Struggling Chinese developer Kaisa Group, whose bonds are traded in Singapore, plunged further into crisis on Monday as several of its bank accounts were frozen and a number of creditors sought immediate repayment of debts.

The Shenzhen-based company said in a statement that on Jan. 7 it had received a waiver from banking group HSBC on a loan it failed to repay late last month.

However, it added that as of Jan. 9 several of its bank accounts were frozen and under investigation by banks. It did not provide further details on the investigations.

It also said it had received a court ruling freezing the assets of a unit amounting to 651.2 million yuan (S$140.23 million), and that the sale of a Shanghai asset to Vanke China, announced on Dec. 31, had been terminated by mutual agreement.

Kaisa would be the first Chinese developer to default on dollar-denominated bonds, according to credit rating agency S&P which cut Kaisa's rating to "selective default" from BB- on Jan. 5.

The company's defaults are spreading concern that other Chinese real estate businesses may suffer payment difficulties as the world's second-largest economy cools and its housing market slows, says Bloomberg News.

The pressure on Kaisa, which warned early this month it may default on more debt after it failed to repay a US$51.3 million (S$68.54 million) loan to HSBC on Dec. 31, has been building.

At least 28 court filings were made against Kaisa and its subsidiaries between Jan. 6 and Jan. 9 in Shenzhen, where Kaisa has most of its assets, according to records in the city's Intermediate People's Court, involving 17 financial institutions.

The institutions include Bank of China, Citi Bank (China), Bank of Communications, the trust unit of Ping An Insurance, Industrial and Commercial Bank of China, China Merchants Bank and China Cinda Asset Management.

The Shenzhen court did not give a reason for the applications. Local media Caixin said they were requests to freeze Kaisa's assets, and filings had also been made in other cities including Dalian, Suzhou, Zhuhai and Huizhou.

Earlier on Monday, a trust unit of China's Shanghai AJ Corp said a Shanghai court had frozen $105 million of Kaisa's assets following its application.

Responding to a $US26 million bond coupon it failed to pay last week, Kaisa said it was "currently assessing its financial position and will make further announcement regarding such interest payment".

The company said it was talking to several candidates about appointing a financial adviser. Its chief financial officer resigned last month.

"The combination of the regulatory lockdown together with the resignations of senior officers and the recent bank default, will in our view, create enormous uncertainty around the firm's operations both in Shenzhen and other markets," independent research firm Lucror Analytics said in a report.