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Kaisa Abandons Hong Kong Projects in Race to Avoid Default

Added 12-02-21 02:04:02am EST - “(Bloomberg) -- In less than two years, Chinese property developer Kaisa Group Holdings Ltd. has gone from being an up-and-coming player in Hong Kong's property market to a desperate seller.Most Read from BloombergReliving the New…” - News.yahoo.com

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Posted By TheNewsCommenter: From News.yahoo.com: “Kaisa Abandons Hong Kong Projects in Race to Avoid Default”. Below is an excerpt from the article.

(Bloomberg) -- In less than two years, Chinese property developer Kaisa Group Holdings Ltd. has gone from being an up-and-coming player in Hong Kong’s property market to a desperate seller.

As it strives to raise money to alleviate a liquidity crunch during China’s property deleveraging campaign, Kaisa has been reversing its expansion in the city with a series of asset sales in the past month.

It’s a dramatic volte face after founder Kwok Ying Shing and his family made headlines earlier this year with acquisitions ranging from land sites to luxury apartments and even a popular local newspaper. Now Kaisa, which became the first Chinese developer to default on offshore dollar debt in 2015, is trying to stave off a repeat that could come as soon as next week if bondholders don’t accept its plea for a lifeline.

Kaisa bought four residential sites in the city since January 2020, marking its official entry in the world’s most expensive home market. But only one of the projects managed to begin selling units to home buyers. The remaining three plots are still in the early phase of development, and Kaisa is giving them up before it can reap the profits from selling them to individuals as apartments.

The need for asset sales will become even more pressing if creditors don’t accept Kaisa’s request to swap its $400 million of notes maturing Dec. 7 for new ones due 18 months later. If the offer -- which expires at 4 p.m. London time on Thursday -- fails to win support, the struggling firm has said it may not be able to repay bonds and could consider a debt restructuring.

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