Kaisa Group in debt restructuring with Citibank, say sources
What’s new: default chinese developer Kaisa Group Holdings Limited completed a debt restructuring with the lender China Citibank Corp.Caixin learned from several independent sources.
Citibank has been a long-term creditor of Cassa and helped the company recover from its past crisis. In 2015, Citibank collaborated with trust companies to provide a 30 billion yuan ($4.5 billion) loan to Casa after a local government in Shenzhen blocked the sale of the company’s real estate amid an anti-corruption investigation.
As part of the rescue loan, 20 billion yuan was exchanged for loans in nine CASA projects. As commercial banks are not allowed to invest directly in properties not for their own use, Citibank had to reprint the Kaisa project loan and hand over equity in the projects to trust companies, a person close to Cassa. disclosed.
Over the past two weeks, Casa transferred equity in several projects in Shenzhen to a special-purpose entity set up by Casa and Citibank, a person close to the matter told Caixin. After the transfer, the projects will be owned by Western Trust Co Ltd, but the actual interests are owned by Citibank, the person said.
The person said that as part of the arrangement, Citibank agreed to extend old loans and provide new funds to complete underlying projects.
background: Cassa is one of the liquidity-squeezed major asset developers in China, which also includes China Evergrande Group, whose weak conditions are rocking global bond markets. Known as the first developer in China to default on dollar debt in 2015, Cassa was labeled a Guilty Again after failing to repay a $400 million dollar bond maturing on December 7.
According to the company’s financial report, as of the end of June 2021, Casa had total assets of 319.1 billion yuan, with liabilities of 237.7 billion yuan. But like most Chinese developers, Cassa also has large balance sheet liabilities that are difficult to estimate.
Cassa has increased asset sales to raise capital. The company sold 18 properties in Shenzhen, mainly urban renewal projects, with a total valuation of 81.8 billion yuan. The list was expanded to 25 projects in November, but no deals have been struck.
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Contact correspondent Dennis Jia () and editor Bob Simison ()
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