Date
19 November 2017
Shenzhen-based Kaisa Group Holdings is urging its bondholders to come to the table and agree to a debt restructuring. Photo: Bloomberg
Shenzhen-based Kaisa Group Holdings is urging its bondholders to come to the table and agree to a debt restructuring. Photo: Bloomberg

Kaisa reveals deeper debt hole

Troubled Chinese property developer Kaisa Group Holdings Ltd. said its debt has reached US$10.4 billion, more than double the amount it previously disclosed, as it pressed foreign bond investors to restructure its loans, the Wall Street Journal reported.

Kaisa said in a filing with the Hong Kong stock exchange that its total debt amounted to 65 billion yuan as of Dec. 31, including 48 billion yuan in mainland China.

It also needs to repay 35.5 billion yuan before the end of this year, the company said. It also said it expects a “substantial decline” in its 2014 net profit, without elaborating.

The latest disclosure marks a sharp jump from the debt load it disclosed in a regulatory filing in September. Back then, it said it had 6.01 billion yuan in current borrowings and another 23.77 billion yuan in longer-term borrowings as of June 30.

The company did not explain the reason for the sudden jump in its debt load, but said the new figures should prompt its bondholders to agree to a renegotiation and cut a deal as soon as possible.

“In light of the financial position at the group and its future obligations, it is anticipated that the restructuring will need to be conducted on an expedited basis,” the company said.

The latest disclosure renews questions about Kaisa’s fate just a week after it struck a HK$4.55 billion (US$587 million) deal with another property developer, Sunac China Holdings Ltd., the newspaper said.

HSBC analyst Keith Chan wrote in a note that he was “negatively surprised by the ballooned interest-bearing debt obligations” and attributed the big increase in the company’s debt to borrowings from China’s informal lenders.

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RA/CG

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