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Kaisa says its US$150 million Xi’an development project is at risk over dispute with local developer Xingzhengyuan
- Kaisa is in a dispute with Xi’an Xingzhengyuan over a 1 billion yuan project to transform a Xi’an shanty town into residential buildings
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Kaisa Group Holdings faces losing its entire investment of almost US$150 million in a key urban redevelopment project, underscoring the vagaries in China’s property market.
The Shenzhen-based home builder, which gained notoriety in 2015 when it became the first developer from the nation to default on US dollar debt, has invested more than 1 billion yuan (US$146 million) in a project in Xi’an to transform a shanty town into residential dwellings.
The project had been abandoned for about two years before Kaisa came on board in August 2017, acquiring a majority stake in the development from Xi’an Xinlicheng and the rights to continue construction.
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However in September of that year, another local builder, Xi’an Xingzhengyuan, removed Kaisa’s legal title to the project, making its investment worthless, Kaisa said in a statement to Bloomberg News on Wednesday.
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Tensions between the two came to a head last week when Xingzhengyuan allegedly drove excavators and fork lift trucks into the construction site, and caused a Kaisa local executive to seek medical treatment, according to the statement.
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