End of the Line For Kaisa as Dozens of Claimants Ask Court to Seize Billions in Assets

Late last week, it was reported that banks and creditors went to Shenzhen Intermediate People's Court to freeze Kaisa's assets. (See Most Important Part of the Kaisa Bankruptcy: What Will The Govt Do?) The list of firms has grown to 15 in Shenzehn, including trust firms, while court cases have spread from Shenzhen to other cities where the firm has projects: Dalian, Suzhou, Zhuhai and Huizhou. A court in Shanghai has also frozen Kaisa assets. Since each bank branch files its own case, there are at least 25 litigants in Shenzhen alone looking to seize Kaisa's assets. The total sum in question is now in the tens of billions (yuan), and already far exceeds Kaisa's 2014 interim report which listed outstanding loans at 29.7 billion yuan because several applicants want to seize projects.

One banker said CITIC Bank may have triggered the panic and run on Kaisa's assets, or it simply reflects the gravity of the situation as banks rush to prevent their loans from going bad. A lawyer is also quoted as saying Kaisa will have limited access to funds now and sales will be affected.

Sina: 15家金主申请查封佳兆业资产 多地项目受波及

English coverage:

Reuters: Court freezes some of China developer Kaisa Group's assets
A Shanghai court has frozen $105 million in assets of Kaisa Group Holdings, a trust unit of China's Shanghai AJ Corp said on Monday, as filings against the troubled property developer pile up.

Shenzhen-based Kaisa warned this month it may default on more debt after it failed to repay a HK$400 million ($51.3 million) loan, the latest developer to flag financial difficulties amid a downturn in the real estate sector.

At least 28 court filings were made against Kaisa and its subsidiaries between Jan. 6 and Jan. 9 in Shenzhen, where Kaisa has most of its assets, according to the latest records in the city's Intermediate People's Court, involving 17 financial institutions.

WSJ: Kaisa Group Asset Freeze Sought by Chinese Financial Organizations
More broadly, the cost of issuing dollar bonds for below-investment-grade Asian companies has surged to 7.8%—the highest level in 16 months—from as low as 6.9% in August, while the cost for Chinese firms, investment grade or below, has jumped to 5.5%, the highest level since May last year, from 5.3% in early December, according to J.P. Morgan Asia Credit Indexes.

No comments:

Post a Comment