Kaisa to sell assets after missing payment as it faces a hectoring by Shenzhen authorities and group’s stocks halt trading in Hong Kong

Kaisa has put 18 property projects with 1.45 million square metres in Shenzhen on the auction block, valued at 81.82 billion yuan

The most valuable project is the 29.8 billion yuan renovation of the Dongjiaotou shanty town in Shenzhen’s Nanshan district

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Buyers queueing for a residential property project by Kaisa Group in the Hubei provincial capital of Wuhan on 5 August 2012. Photo: ImagineChina.

Published: 1:26pm, 5 Nov 2021Updated: 10:54pm, 5 Nov 2021

Kaisa Group Holdings is selling assets to raise capital for liabilities including a missed payment on a wealth product and US$11 billion of dollar bonds, as it faces a hectoring by Shenzhen’s government and the trading of its stocks were halted in Hong Kong.

The developer has put 18 property projects with 1.45 million square metres (15.6 million square feet) in Shenzhen on the auction block, with a combined value estimated at 81.82 billion yuan (US$12.8 billion), according to a catalogue seen by South China Morning Post.

The developer plans to start selling assets as soon as next month, aiming to wrap up the process by the end of 2022, according to people familiar with the programme, declining to be identified. Kaisa’s spokespeople did not immediately respond to requests for comment.

Kaisa this week missed a payment on a 12.8 billion yuan wealth management product sold by its Kaisa Finance unit. More than 100 investors of the high-yield financial product protested at the company’s head office, forcing Kaisa Finance executives to face up, ending in a recorded video message by chairman Kwok Ying-shing to plead for more time.

Kwok Ying-shing, chairman and chief executive officer of Kaisa Group Holdings, during the company's 2017 financial results press conference in Hong Kong. Photo: JOnathan Wong.

Kaisa faced “unprecedented pressure on its liquidity” because of credit rating cuts and unfavourable market conditions, Kwok said, promising investors that the company will not shirk its responsibilities.

Alarmed at the public outrage sparked by the default, Shenzhen’s authorities summoned Kaisa and the developer Fantasia Holdings to a meeting on Friday, where the housing regulator will discuss the companies’ financial liquidity, according to The Paper. Fantasia, founded by the niece of the former Chinese Vice-President Zeng Qinghong, missed a payment on a US$205 million offshore bond in early October, the first among China’s cash-starved developers to be in default.

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