Embattled Chinese developer Kaisa Group is facing a default after saying Friday it had failed in a bid for a debt swap that would buy it crucial time, and warned there was "no guarantee" it would be able to meet its debt obligations.

The company is one of several real estate firms that have plunged into crisis over the past year after China embarked on a regulatory drive to curb speculation and leverage, cutting off a crucial avenue for accessing cash.

The highest profile of them is China Evergrande, which is drowning in a sea of debt worth $300 billion, and is struggling to meet its own obligations fanning concerns about the whole property sector, which makes up a substantial part of the world's number two economy.

Kaisa last month announced a plan to delay the repayment timeline for some of its bonds, offering an exchange for at least $380 million of notes, which would give it some room to find money further down the line.

However, the offer failed to win the 95 percent approval from bondholders needed for the plan to go ahead.

In a statement on Friday, the firm said it will explore solutions "including but not limited to renewal and extension of borrowings and disposing of assets".

But "there is no guarantee" it would be able to meet its repayment obligations under the existing notes at maturity. It added that it has $400 million of dollar notes maturing on Tuesday.

Its share price tumbled eight percent in Hong Kong in morning trade.

Failing to repay the principal on the notes will be considered a default, and risks triggering cross default on its other debt.

With Chinese developers struggling to meet their debt obligations, Beijing has shown signs of stepping back from its tough line on the property industry.

Last month, the southwestern city of Chengdu also announced measures to make it easier for companies to sell properties, making it the first to loosen restrictions on the embattled sector.

bys/rox/dan

China Evergrande Group

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The Space Media Network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceMediaNetwork Contributor $5 Billed Once credit card or paypal		SpaceMediaNetwork Monthly Supporter $5 Billed Monthly paypal only

US accuses China of 'economic warfare' against Australia
Sydney (AFP) Dec 1, 2021
US President Joe Biden's top Pacific envoy on Wednesday accused China of trying to "drive Australia to its knees" through a barrage of sanctions that amounted to "economic warfare". In remarks to the Sydney-based Lowy Institute, veteran diplomat Kurt Campbell lampooned Beijing for strong-arm tactics. Painting China as increasingly bellicose and determined to impose its will overseas, Campbell said Beijing had engaged in "really dramatic economic warfare - directed against Australia". Over t ... read more