Kaisa Group appoints financial adviser; shares to resume trading
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Kaisa said it hasn't received any notice regarding acceleration of repayment by holders.
PHOTO: REUTERS
HONG KONG (BLOOMBERG) - Kaisa Group Holdings has appointed Houlihan Lokey (China) as financial adviser and Sidley Austin as legal adviser after missing multiple offshore debt payments.
The financial adviser will evaluate Kaisa's liquidity and explore all feasible solutions, the company said in a stock exchange filing on Monday (Dec 20).
Kaisa said it has not received any notice regarding acceleration of repayment by holders, and has been in talks with holder representatives about a comprehensive debt restructuring plan. The company's shares will resume trading on Monday for the first time since Dec 7.
Fitch Ratings downgraded Kaisa to restricted default earlier this month, citing its failure to repay a US$400 million (S$545 million) dollar bond that matured on Dec 7. It is the second time that Kaisa has lapsed into default in six years. Kaisa has also missed interest payments on two dollar bonds after grade periods ended, increasing pressure on the company to come up with a restructuring plan.
The developer's woes add to contagion risks in Chinese credit markets, which are already grappling with a looming restructuring by China Evergrande Group. Fitch has also cut Evergrande to restricted default. Last Friday, Shimao Group's credit rating was slashed to junk territory from investment grade by Fitch.
Shenzhen-based Kaisa is one of the largest issuers of dollar notes among Chinese developers, with more than US$11 billion outstanding. It had become a symbol of the boom years in Chinese credit markets after emerging from a high-profile default in 2015.
Shares of Kaisa last traded on Dec 7. Its stock has dropped 75 per cent this year.
