By Gina Lee
Investing.com –Kaisa Group Holdings Ltd.'s (HK:1638) shares sparked as they resumed trading in Hong Kong, with investors cheering efforts to solve a liquidity crisis.
Shares jumped 18.81% to HK$1.20 ($0.15) by 10:32 PM ET (3:32 AM GMT), after climbing up to $1.25 earlier in the session.
The Chinese property developer is working to extend the maturity of a $400 million bond by a year and a half, in a bid to avoid a default and resolve a liquidity crisis. If at least 95% of the holders of the offshore bond accept its offer, it will exchange the 6.5% notes due Dec. 7 for new notes due June 6, 2023, at the same interest rate, Kaisa said in a company filing. Should the offer fail, the developer may not be able to repay bonds and could consider a debt restructuring.
Regulatory curbs on borrowings have caused a liquidity crunch for Chinese developers, which has recently led to a string of offshore debt defaults, credit rating downgrades, and sell-offs in some developers' shares and bonds.
Kaisa currently has the most offshore debt of any Chinese developer after China Evergrande Group (HK:3333). It missed coupon payments totaling over $59 million due on Nov. 11 and 12, which have a 30-day grace period.
The company has been scrambling to raise capital to pay off some of this debt. It has divested some of its assets, including Hong Kong-listed property management unit Kaisa Prosperity Holdings Ltd. In a separate filing on Wednesday, Kaisa added that it is considering speeding up the disposal of real estate projects and other high-quality assets to improve its liquidity.