Sunac China Holdings Ltd. is looking into buying a stake in cash-strapped Kaisa Group Holdings Ltd.
Kaisa is in talks with other parties and it is not clear if Tianjin-based Sunac is the frontrunner, according to the Wall Street Journal.
Developers such China Vanke Co. and Shenzhen Overseas Chinese Town Co. are also in discussions with Kaisa.
The discussions are more focused on Sunac taking an equity stake in Kaisa, the report cited a person familiar with the matter.
Local authorities in the southern Chinese city of Shenzhen blocked the developer from selling projects last year but did not publicly give a reason.
A number of top Kaisa executives later resigned. The Shenzhen-based company subsequently defaulted on a bond interest payment, prompting other creditors to demand repayment and freeze some of the company’s bank accounts.
The people familiar with the talks said officials from the Shenzhen government are involved in the negotiations.
No property developer would enter an agreement to take over Kaisa’s holdings without the government’s support, since the government blocked Kaisa’s sales in the first place, the report said.
Over the weekend, hundreds of homeowners that have bought uncompleted homes from Kaisa protested in Shenzhen, demanding assurances that their homes would be completed and handed over on time.
“It is not just a commercial transaction now. It also concerns social stability,” the person said.
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