2015-01-01

Top 20 Developer Defaults

CASS predicts half of the developers might disappear, mainly the small and mid-size developers in cities with excess inventory. This year is kicking off with trouble for a listed developer though: Kaisa Group Defaults on $52 Million Loan After Chairman Resigns
Kaisa Group Holdings Ltd. (1638) failed to pay a HK$400 million ($51.6 million) loan, raising questions about the Chinese developer’s ability to pay other debts.

Automatic repayment of the August 2013 term loan facility from HSBC Holdings Plc was triggered by the Dec. 31 resignation of Kaisa’s chairman, Kwok Ying Shing, the company said today in a Hong Kong stock exchange filing. The company is assessing whether its failure to pay the outstanding debt plus interest may trigger cross-defaults and have a material adverse impact on the company, it said.

Kaisa’s stock fell 47 percent in December -- its steepest monthly decline on record -- as authorities in the southern Chinese city of Shenzhen blocked its projects and key personnel departed.

According to CREIS, Kaisa was the 19th largest developer in 2014 with sales of more than ¥30 billion.

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