China’s greater risk of developing instability comes as the real estate sector is hit by unprecedented financial cuts.
Chinese manufacturer Kaisa Group Holdings Ltd has failed to obtain the required 95 per cent approval required by foreign bond holders to increase the maturity of the $ 400m note due next week, posing a risk of failure.
With China’s economic sector affected by unprecedented inflation, Kaisa is now facing the possibility of failing to repay its 6.5% bond on December 7 and showing interest in developers who are also looking at the growing maritime debt crisis. ‘The next few months. .
“In order to alleviate the problem and find a better solution for all involved, the company is monitoring and evaluating the team’s financial performance,” it said on Friday.
Kaisa expects to exchange $ 400m marine bonds of $ 400m for new notes due to be due June 6, 2023 at the same interest rate if about 95 per cent of its holders agree. It did not say how many bond owners agreed to give.
The share of troubled companies fell 9.8 percent to $ 0.92 in the Hong Kong dollar ($ 0.12), down from about 75 percent this year.
The company, which became the first Chinese producer to fail to repay its dollar debt in 2015, said it had negotiated with other representatives with the bonds, but no “legal agreement” had been entered into.
It added that it was still looking to sell the stock and increase or restructure the loan, but warned that there was no guarantee that it would be able to mature on December 7.
Failure to repay or enter into an agreement with creditors could “have a negative impact” on the economy in Kaisa, it said.
Kaisa is second only to China’s second-largest real estate retailer after China’s Evergrande Group, with more than $ 300bn in debt, and like others have been working hard to raise funds to avoid repaying the debt.
Reuters news agency reported last month that the company wanted to sell its Hong Kong-based stockbroker, Kaisa Prosperity Holdings Ltd.
Last week, in exchange for his notes, Kaisa said he could consider repaying the loan if the borrower did not agree to increase maturity.
Kaisa’s failure to find a much-needed rescue solution from lenders will also hurt other small-scale developers who want to avoid long-term and disruptive lawsuits and redesign the process, experts say.
Also in the horizon is the end of 30 days grace for Evergrande, which has been avoiding a bit of instability, failed to pay the $ 82.5m coupons due on November 6.
