Kaisa, Times China get reprieves in Hong Kong winding-up cases, promise debt workout plans

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The developers, which defaulted on US$15 billion of offshore debts, get four- and 10-week adjournments in lawsuits from hostile creditors

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The High Court in Admiralty will be a hive of activity as debt-laden Chinese developers try to fend off creditors. Photo: Warton Li

Yulu Ao,Eric JiangandXinyi Wu

Published: 9:15am, 12 Aug 2024Updated: 10:53am, 12 Aug 2024

Troubled Chinese developers Kaisa Group and Times China Holdings, which defaulted on a combined US$15 billion of offshore debts, have been granted more time to negotiate with creditors as the city’s High Court on Monday ordered adjournments in their winding-up hearings.

Shenzhen-based Kaisa Group got a four-week reprieve after Justice Anthony Chan adjourned the case to September 9. The company will announce a debt workout plan before the next hearing, Lai Ling Tam, senior advisor for the Kaisa Group, said outside the court after the hearing.

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Kaisa Group has tried to restructure its debt for more than two years after defaulting on about US$12 billion of bonds and other borrowings since late 2021. It was the second-largest issuer of offshore bonds among Chinese developers after Evergrande, and the first in the industry to default on dollar-denominated bonds back in 2015.

China’s multi-year slump in the property market since 2020 has produced at least US$100 billion defaults in the industry, according to a Goldman Sachs estimate. Some 59 issuers defaulted on 319 offshore bonds while 49 defaulted on 194 onshore bonds as of April this year, according to S&P Global Ratings.

Bondholders, through their trustee Citicorp International, filed a winding-up petition against Kaisa after it failed to repay a US$750 million bond, according to stock exchange filings. The firm had 226.4 billion yuan (US$31.6 billion) in total liabilities on December 31, according to its annual report.

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Times China Holdings, based in Guangzhou, got a 10-week reprieve as the Judge pushed the case to October 21 after lawyers for both sides asked for an adjournment.