Kaisa misses payment on wealth product, prompting chairman to plead for time to overcome developer’s liquidity crunch
- The wealth management product issued by Kaisa’s subsidiary is worth US$2 billion
- ‘Give us some time to work out a solution,’ says Kaisa chairman and CEO Kwok Ying-shing
Shenzhen-based developer Kaisa Group Holdings has missed a payment on a wealth management product (WMP), the latest sign of cracks widening in mainland China’s property sector.
Admitting that Kaisa was facing “unprecedented pressure on its liquidity” because of credit rating downgrades and unfavourable market conditions, chairman and chief executive Kwok Ying-shing promised investors that the company will not shirk its responsibilities.
“Give us some time, Kaisa will be able to work out a solution,” Kwok told investors on Thursday, according to a video circulating on the internet.
The company said in a statement that it was making an all-out effort to raise fresh funds and speed up the process of clearing housing inventory. It pledged to unveil details of the repayment plan soon.
The WMP, issued by Kaisa Finance, a unit of the property group, is reported to be worth 12.7 billion yuan (US$2 billion). According to Reuters, Kaisa Finance met more than 100 investors in Shenzhen on Thursday to explain the situation.