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The Kaisa Group share has been suspended from trading on the Hong Kong Stock Exchange for almost three weeks, after the company in early November did not fulfill its obligations on a savings product that the company has offered investors.
On Thursday, trading in the share is underway again. The share rises around 20 percent from the start after the company announces that the obligations have now been met, at the same time as the company says it will refinance soon maturing bond loans of 400 million dollars by issuing new bond loans. If the company does not receive the necessary support from creditors, a larger debt structuring may be necessary, writes Bloomberg.
The stock is up around 20 percent on the Hong Kong Stock Exchange.
The second largest
Kaisa is the second largest Chinese issuer of high-interest loans outside China, according to Natixis and CNBC. Only crisis-stricken Evergrande is larger.
Both Kaisa and Evergrande have long been under strong pressure due to enormous debt and poor ability to pay. Over the years, Evergrande borrowed large sums of money and bought hundreds of plots across China, built giant high-rise blocks and sold apartments for several years before being completed. The company also expanded to amusement parks, health services and electric vehicles. They also bought a professional football team in their home province of Guangdong. The company was China’s largest real estate company.
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The expansion was largely loan-financed, and led to the real estate conglomerate putting $ 300 billion, or close to NOK 2.7 trillion, into debt.
In the last year, the Evergrande share has fallen around 85 percent, thus wiping out several hundred billion kroner in stock market values. Evergrande was suspended from trading on the Hong Kong Stock Exchange for an extended period this fall.
“Enormous pressure”
The Kaisa Group share, for its part, has fallen 66 percent in the past year, today’s rise included in the calculation.
The company makes no secret of the fact that it is in a very challenging situation.
“Continued government tightening, more defaults and weakened consumer sentiment have resulted in the temporary closure of various refinancing arenas for the sector, putting enormous pressure on our short-term liquidity,” Kaisa Group wrote to the Hong Kong Stock Exchange on Thursday. according to CNBC.
Otherwise quiet
There is little movement on the Asian stock exchanges on Thursday morning Norwegian time. Technology giants Alibaba and Tencent are rising cautiously after several days of falls. The Hang Seng index in Hong Kong is rising around 0.1 percent.
The Shanghai SE index in China falls 0.1 percent. The Nikkei 225 index rises close to 0.8 percent.
On Thursday, the South Korean central bank decided to raise its key interest rate by 25 basis points to 1.0 per cent, in line with analysts’ expectations. The Kospi index in South Korea falls around 0.4 percent on Thursday. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For additional terms look here.
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