Cash-stressed Kaisa Group, a property developer based in China, has finally released its overdue financial results for the fiscal year 2021 and H1 of 2022, revealing considerable losses and a notable decline in revenue. Along with other Chinese developers, Kaisa has failed to meet its offshore debt obligations due to financial difficulties and sluggish sales, prompting some to urgently seek restructuring deals with their lenders. International investors have been frustrated by the lack of progress in several long-term restructurings, and they have threatened legal action due to the resulting delays. The company is said to be holding meetings with investors in Hong Kong this week to provide updates on its progress.
Cash-stressed Kaisa Group, a property developer based in China, has finally released its overdue financial results for the fiscal year 2021 and H1 of 2022, revealing considerable losses and a notable decline in revenue. Along with other Chinese developers, Kaisa has failed to meet its offshore debt obligations due to financial difficulties and sluggish sales, prompting some to urgently seek restructuring deals with their lenders.
International investors have been frustrated by the lack of progress in several long-term restructurings, and they have threatened legal action due to the resulting delays. Kaisa did not immediately respond to requests for comment. Evergrande, which has $300 billion in liabilities, $20 billion of which are held by international investors, has repeatedly failed to provide a restructuring plan within the designated deadlines. The company is holding meetings with investors in Hong Kong this week to provide updates on its progress.
Kaisa Group Holdings Ltd. Is a real estate developer based in Shenzhen, China. It was founded in 1999 and operates in major cities across China. Kaisa Group develops residential, commercial, and industrial properties, and has received awards for its projects and commitment to sustainability. The company has faced challenges in the past related to financial difficulties and regulatory investigations, but has since recovered and continued to grow.
Trading for Kaisa, a company listed in Hong Kong, and some of its peers, such as China Evergrande Group, which is the most heavily indebted property developer globally, was suspended for almost a year due to a delay in releasing their yearly financial reports.
Kaisa has applied to the stock exchange to resume trading starting from March 10. In November of last year, Kaisa, which is the second-largest Chinese developer in terms of U.S. dollar bond issuance, postponed negotiations with offshore creditors regarding the terms of debt restructuring, as reported by Reuters.
Kaisa has stated that it will continue to communicate with its creditors and will provide updates on the progress of restructuring as appropriate. Kaisa reported a loss of 7.67 billion yuan ($1.10 billion) for the six months ended June 31, 2022, compared to a profit of 3 billion yuan in the previous year. In 2021, the company incurred a loss of 12.73 billion yuan.
In 2020, Beijing introduced the “three red lines” measures aimed at decreasing leverage, which increased liquidity pressures on developers. However, towards the end of the year, the government provided new credit lines from state-owned banks to real estate companies it deems as “high-quality,” providing these developers with much-needed access to credit.
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