Struggling Chinese property developer Kaisa has had an offer to lengthen the maturity of their debt rejected by its offshore bondholders, casting further doubts over the company’s attempts to avoid a default next week, reports the Financial Times. The move may well worsen a crisis at Kaisa, one of China’s most indebted developers, which has launched a fire sale of its assets in a bid to meet liabilities that include about $3bn of dollar bonds that will come due in the next 12 months.
A group claiming to represent more than 50% of the investors in some of its most pressing debt—a $400m bond that will mature on December 7—wrote to Kaisa on Tuesday to say that a proposal it made late last month to exchange the bonds was “unacceptable,” according to a letter seen by the FT.
The offer, which was proposed by Kaisa on November 25, would swap the bonds for new notes maturing in June 2023 but required the approval of 95% of bondholders. Kaisa warned in a stock exchange filing that if the offer failed it might not be able to repay the bonds and could consider a debt restructuring.