Shares of two of struggling developer Kaisa Group’s units dropped to multi-year lows in Hong Kong after a seven-day trading halt, despite trying to distance themselves from their embattled parent company, which has missed payments on an offshore bond and wealth management products, reports the South China Morning Post.
Kaisa Prosperity Holdings retraced 10.6% to $1.73 as the management services unit clawed back some of its 16.6% plunge, the biggest intraday drop since its 2019 initial public offering. Kaisa Capital Investment Holdings Limited fell 10.9% to $0.05, after tumbling by almost 22%.
Kaisa Group, whose shares remained suspended in Hong Kong, missed two bond coupon payments due on November 11 and 12, two people familiar with the matter said. The company has been given 30 days to comply before bondholders are entitled to declare it in default, a move which could trigger cross defaults across all its offshore debt, and in the worst case set the stage for creditors to petition for its liquidation.
Kaisa Group has about $3.2 billion of offshore senior notes due in the next 12 months, including US$400 million that matures on December 7. Trailing only China Evergrande Group in the size of its offshore debt.