Shares of Kaisa units tumble in Hong Kong even as they distance themselves from the travails of their indebted parent

The shares of two units of China’s Kaisa Group plunged to multi-year lows in Hong Kong after emerging from a seven-day trading halt, even as they tried to draw a distance from their embattled parent, which has missed payments on an offshore bond and high-yielding financial products.

Kaisa Prosperity Holdings retraced 10.6 per cent to HK$13.50 as the management services unit clawed back some of its 16.6 per cent plunge, the biggest intraday drop since its 2019 initial public offering. Kaisa Capital Investment Holdings Limited fell 10.9 per cent to 41 Hong Kong cents, after tumbling by almost 22 per cent.

Kaisa Group, whose shares remained suspended in Hong Kong, missed two bond coupon payments due on November 11 and 12, two people familiar with the matter said. The company has been given 30 days to comply before bondholders are entitled to declare it in default, a move which could trigger cross defaults across all its offshore debt, and in the worst case set the stage for creditors to petition for its liquidation.

Kaisa Prosperity, 67.7 per cent owned by Kaisa Group, has not experienced any “material delay” in receiving payments for services rendered, and is not involved in any missed dividend payments by its parent, the company’s chairman Liao Chuanqiang said in a filing to the Hong Kong stock exchange before trading of its stock resumed.

Kaisa Health Group Holdings, which produces prosthetic dental products, was the contrarian, jumping almost 26 per cent to 12.2 Hong Kong cents when its stock resumed trading, after soaring by 39 per cent earlier.