Wrapup 3: China developer Kaisa pleads for help, 'patience' as sector's debt woes mount

Starjoy Wellness and Travel

09/11/2021 07:38

* Kaisa says needs help to pay investors, workers,
suppliers-source
    * Developer met Chinese govt think-tank in Shenzhen -source
    * News comes amid deepening worries over China's property
sector

 (Recasts story on Kaisa; updates shares)
    SHANGHAI/BEIJING, Nov 9 (Reuters) - Kaisa Group Holdings
 1638.HK  needs help to pay investors, workers and suppliers,
the developer told a meeting of a Chinese government think-tank,
banks and property firms, according to a source with direct
knowledge of the matter.
    The troubles of China Evergrande Group  3333.HK , the
world's most indebted developer, have reverberated throughout
China's real estate sector, sparking offshore defaults, credit
rating downgrades and sell-offs in some developers' shares and
bonds in recent weeks. 
    Underscoring Kaisa's troubles, the company said separately
it was trying to solve its liquidity problems, was consulting
investors in wealth management products about better payment
solutions and pleaded for more breathing space. 
    "We sincerely ask investors to give Kaisa Group more time
and patience," it said in a statement on its official WeChat
account late on Monday.  urn:newsml:reuters.com:*:nL1N2S000N
    Earlier on Monday, Kaisa attended a meeting with the
Development Research Center of the State Council, other
developers and lenders in the southern Chinese city of Shenzhen,
the source said.
    The think-tank makes policy proposals on China's national
development and its economy, but is not a decision-making body.
    At the meeting, Shenzhen-based Kaisa urged state companies
to help private firms improve liquidity through project
acquisitions and strategic purchases, the source added.
    Participants at the meeting included China Vanke
 000002.SZ , Ping An Bank  000001.SZ , China Citic Bank
 0998.HK , China Construction Bank  601939.SS , CR Trust,
Southern Asset Management and developer Excellence Group,
according to the source. 
    Kaisa, China's 25th largest developer by sales, told those
at the meeting it is facing significant difficulties amid rating
downgrades and banks curbing loans, the source said. 
    The developer said some financial institutions had
transferred funds from its accounts inappropriately and it urged
all lawsuits seeking a freeze of its assets to be handled
centrally in a Shenzhen court, the source added.
    Kaisa, Vanke and Citic Bank declined to comment. Excellence
and the other banks that participated in the meeting did not
immediately respond to requests for comment.
    The State Council Information Office also did not respond to
a request for comment. The source declined to be identified due
to the sensitivity of the matter.
    China's property sector troubles have kept global markets on
tenterhooks and led to a string of Beijing officials speaking
out in a bid to reassure investors the crisis will not spiral
out of control.  urn:newsml:reuters.com:*:nL4N2RI1AS
    Underscoring global concern on the situation, the U.S.
Federal Reserve said on Monday in its latest report on financial
stability that stresses in China's real estate sector, caused in
part by regulatory focus on leveraged institutions, as well as a
sharp tightening of global financial conditions could pose some
risks to the U.S. financial system.
    
    
    UPCOMING DEADLINES  
    Trading in shares of Kaisa, which has been looking to sell
some of its assets to raise cash, and three of its units was
suspended last week, a day after an affiliate missed a payment
to onshore investors.  urn:newsml:reuters.com:*:nL1N2RW06K
    Kaisa has the most offshore debt of any Chinese developer,
after Evergrande. 
    Evergrande is grappling with liabilities of more than $300
billion, which, if not managed, could pose systemic risks to
China's financial system.
    Beijing has been prodding government-owned firms and
state-backed property developers to purchase some of
Evergrande's assets, people with knowledge of the matter
previously told Reuters.  urn:newsml:reuters.com:*:nL1N2QU37K
    Some holders of offshore bonds issued by a unit of 
Evergrande had not received interest payments due on Nov. 6 by
Monday evening in Asia.  urn:newsml:reuters.com:*:nL1N2RZ03Z
    Twice in October, Evergrande narrowly averted catastrophic
defaults on its $19 billion worth of bonds in international
capital markets by paying coupons just before the expiration of
their grace periods.
    One such period expires on Wednesday, Nov. 10, for more than
$148 million in coupon payments that had been due on Oct. 11.
Evergrande is also due to make coupon payments totalling more
than $255 million on its June 2023 and 2025 bonds on Dec. 28.
    Shares of Evergrande rose as much as 4% on Tuesday. 
    Separately, shares of small developer China Aoyuan  3883.HK 
jumped over 6%.
    Infini Capital told Reuters on Tuesday it had accumulated
shares of China Aoyuan's property management unit, Aoyuan
Healthy Life Group  3662.HK , continuously in the past few weeks
to become its second-largest shareholder.
    Aoyuan Healthy said last week it was in preliminary
discussions with several independent third parties regarding the
possible disposal of a stake in certain units.  urn:newsml:reuters.com:*:nFWN2RV1S0
    Infini said it hopes Aoyuan Healthy will sell the whole
company rather than its assets.

 (Reporting By Samuel Shen, Cheng Leng and Tony Munroe;
Additional reporting by Joy Leung and Clare Jim in Hong Kong;
Writing by Anne Marie Roantree; Editing by Kim Coghill and
Muralikumar Anantharaman)
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net))