Fresh China property fears as another giant misses key bond payment

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Another Chinese developer has missed its payment deadline, forcing its shares to be suspended from trading and fresh concerns for the country’s already troubled real estate sector.

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Trading in shares of Casa Group Holdings and three of its units was halted on the Hong Kong Stock Exchange on Friday after one of the company’s finance units defaulted on payments on a wealth management product (WMP) the previous day. WMPs are uninsured short-term notes sold in China.

The chief executive of the Shenzhen-based homebuilder, Kwok Ying-shing, has admitted that the company was facing “unprecedented pressure on its liquidity”.


The finance arm said it is taking several steps, including expediting the sale of its assets, to clear the dues. Cassa reportedly plans to sell 18 of its properties in the city of Shenzhen by the end of 2022, mostly retail and commercial properties, worth a total of 81.8bn yuan (£8.9bn).

In a filing Friday, the company said its shares were being suspended until “insider information” was released, but did not elaborate.

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However, after the news of the missed payment became public, the company’s stock had taken a major hit by then. Shares fell 15 per cent on Thursday.

Kaisa’s crisis is one of a series of cash crunches and payment defaults among real estate companies in China, which have been battling debt and stringent norms. Evergrande, the second-largest Chinese developer, has already kept investors on its toes with its £217bn loan that it is struggling to reduce.

Last week, Evergrande avoided defaulting for a second time by paying its payments on offshore bonds before the end of the grace period. Another deadline is coming on November 10.

Another Chinese developer, Modern Land, defaulted on its bond coupon payments last month.

Cassa has approximately £2.3bn in offshore senior notes over the next 12 months, with coupon payments totaling £43m on 11 and 12 November.

Additional reporting by agencies


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