Shares of Chinese real estate developer Kaisa pop 20% after debt restructuring plan

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Kaisa Group Holdings Ltd.'s City Plaza improvement nether operation successful Shanghai, China, connected Tuesday, Nov. 16, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING — Chinese existent property developer Kaisa announced Thursday plans for paying backmost investors, temporarily alleviating concerns astir a default arsenic China's spot assemblage continues to look pressure.

Kaisa's Hong Kong-listed shares popped 20% successful the marketplace open, earlier paring immoderate gains. It was the archetypal time of trading aft a astir three-week halt. The developer had suspended trading aft missing a outgo connected a wealthiness absorption product earlier this month.

"Repayment measures person been implemented" for astir 1.1 cardinal yuan ($171.9 million) of the wealthiness absorption products, Kaisa said successful a filing with the Hong Kong banal exchange. The developer said it's successful negotiations astir repayment of the remaining 396.6 cardinal yuan successful wealthiness absorption products.

Separately, Kaisa said it would restructure offshore indebtedness payments owed successful December by offering investors caller bonds worthy $380 cardinal that are present owed successful 2023. The archetypal U.S. dollar-denominated bonds were worthy $400 million.

Among Chinese developers, Kaisa is the second-largest issuer of U.S. dollar-denominated offshore high-yield bonds, according to French investment bank Natixis. Evergrande, the world's astir indebted existent property developer, ranks first.

As of the archetypal fractional of this year, Kaisa had crossed 2 of China's 3 "red lines" for existent property developers that the authorities outlined, according to Natixis.

"Persistent tightening governmental policy, aggregate recognition events and deteriorating user sentiment person resulted successful impermanent shut-down of assorted refinancing venues for the assemblage and enactment tremendous unit connected our short-term liquidity," Kaisa said successful a filing Thursday.

"Despite our efforts to trim our interest-bearing indebtedness successful effect to authorities regulations, the existent crisp downturn successful the financing situation has constricted our backing sources to code the upcoming maturities," the institution said.

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