Written by Claire Jim
HONG KONG (Reuters) – A Hong Kong court on Monday gave Chinese property developer Caisa Group a seven-week deadline to finalize a debt restructuring plan, postponing a hearing on its liquidation petition for what it said could be the last time.
The Supreme Court postponed the hearing to August 12 after the petitioner representing a major group of bondholders granted Kaisa’s request for more time.
The Shenzhen-based developer has been working to restructure its foreign debt since defaulting on $12 billion in foreign debt payments in late 2021. At a hearing in April, Caisa told the court it would finalize the terms by the end of May.
Judge Peter Ng told the court on Monday that he was “not sure whether the (next) judge would agree to any further postponement” and that Kaisa “really has no excuse if there is no progress”.
Citicorp International, the bond trustee for an ad hoc group of bondholders (AHG), has served as a petitioner since March after a previous petitioner withdrew.
“There are seven members in the AHG and it takes some time to work out the final small details,” LL Tam, senior counsel for Kaisa Group, said after the hearing.
He said the developer hopes to sign an agreement within two weeks. The deal will include the issuance of new shares to creditors, although Chairman Kok Ying Shing will remain the majority shareholder, Tam said.
Kaisa shares were down 5.8% by noon versus a 1% decline in the Hang Seng Mainland Properties Index.
Kaisa is the second-largest issuer of external debt among Chinese developers after China Evergrande Group, but in 2015 it became the first among its peers to default on dollar bonds.
It is not alone in fighting the liquidation, as creditors have filed petitions against Country Garden and others. China Evergrande was ordered to be liquidated earlier this year.
Chairman Kwok returned to mainland China from Hong Kong for the first time in nearly a decade to seek regulatory approval for an overseas debt restructuring, Reuters reported last week.
The sources said he had been in Shenzhen for about two months for talks with a government committee and local organizers.
Tam told Reuters on Monday that Kwok will return to Hong Kong after visiting projects in Shenzhen and ensuring they are completed and delivered.
(Reporting by Claire Jim in Hong Kong; Editing by Kim Coghill and Christopher Cushing)