Kaisa Group Holdings, the offshore bondholders group of cash-strapped, acquires housing projects. The firm offers more than $2bn to the Shenzhen developer to meet completion. This takeover news is actually still in the early stages. People close to the matter declined to speak in the media on this subject. If the acquisition works as expected, it pioneers foreign investor takeover of a Chinese developer’s distressed residential assets amids the crises. This also enters the situation where authorities contain a mortgage boycott by homebuyers in contradiction to the stalled projects.
Kaisa Group Holdings is actually the second biggest US dollar bond issuer in the bloc. The first is China Evergrande Group processing $12bn offshore debt restructuring after its last year default. The company also struggles to repay its onshore debt and enter capital to finish its projects. According to the people, this offshore bondholder group represented by financial advisory group Lazard offered to acquire Kaisa’s stalled projects. This project is to the developer’s adviser Citic Securities. The company plans to offer more than $2bn to purchase some non-performing loans from Kaisa’s lenders. So, they will be tied to the unfinished housing projects. But there is a 20-25% discount. The firm also maintains financing to complete the project.
The offering terms are actually the same with the offshore creditors’ group and the previously extended Chinese asset managers. Kaisa however, declined to comment about the further detail. Meanwhile, Citic and Lazard did not leave any remark. Most of Kaisa’s projects are actually the best in Chinese cities. Their housing prices are relatively strong. So, bondholders attempt to gain profits after stalled projects completion.