Chinese developer Kaisa to seek court approval for offshore loan restructuring plan

Troubled Chinese developer Kaisa Group said it would seek court approval for its offshore restructuring plan as soon as possible despite still lacking majority support from bondholders.

In a statement to the Hong Kong stock exchange Wednesday night, the Shenzhen-based developer said investors holding in excess of 58 per cent of its outstanding offshore loans and bonds have signed its restructuring support agreement.

Tam Lai Ling, Kaisa’s senior adviser, said the company would seek approval from both Hong Kong and Cayman Island courts to hold a creditors’ meeting as soon as possible to discuss its debt restructuring plan, even though it hasn’t received 75 per cent shareholder support – the threshold needed to proceed with its plan.

“Some creditors show support for our plan but they have not yet signed the agreement,” Tam told the South China Morning Post. He said some creditors preferred not to sign because they would be restricted from freely trade their bonds in the secondary market once they made the agreement.

The timing of the creditor meeting will be dependent on the court’s arrangement, Kaisa said in the statement. Tam added that the company was confident in obtaining enough votes at the court meeting.

Hong Kong and Cayman Islands law requires approval of 75 per cent of shareholders by value when casting votes to implement a restructuring. The approved plan would be applied to all bondholders.