Asian Markets

Bondholder rejection forces China developer’s hand

2 minute read

A picture shows the Kaisa Plaza of Kaisa Group Holdings Ltd on a hazy day in Beijing, China, November 5, 2021. REUTERS/Thomas Peter/File Photo

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HONG KONG, Dec 1 (Reuters Breakingviews) - Kaisa’s (1638.HK) bondholders are upping their game. A group of investors has turned down the Chinese developer’s appeal to exchange $400 million in notes due in a week into a new, 18-month bond. The company says the deal could avoid a wider restructuring read more , but with nothing offered to sweeten the pot, it looked a dud from the start.

The investors, who say they own more than 50% of the paper, are instead offering some repayment forbearance in return for discussions on its proposals to inject around $2 billion in fresh funds. Kaisa, which defaulted and restructured in 2015, has so far been unreceptive to their ideas. In September it sold $300 million in dollar bonds, supporting the idea that it is experiencing a short-term cash crunch, not a solvency issue. The real test however will be whether it takes up the bondholder offer or pushes ahead with its threat to restructure its entire $12 billion of debt. (By Jennifer Hughes)

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