Exclusive-Kaisa chairman returns to Shenzhen to meet regulators, sources say By Reuters

Chairman of Kaisa Group Returns to Mainland China:

• Chairman Kwok Ying Shing returned to mainland China after almost a decade to seek regulatory approval for an offshore debt restructuring.
• He traveled to Shenzhen, where Kaisa is based, for talks with officials about the restructuring.
• This move is seen as a critical step for the company's restructuring efforts amidst facing a liquidation petition in a Hong Kong court.
• Kwok had avoided the mainland since 2015 when Kaisa first defaulted on its dollar bonds.
• Chinese regulators' approval is crucial for the implementation of the restructuring plan.

Debt Issues and Restructuring Challenges:

• Kaisa completed its first debt restructuring in 2016 but defaulted again in late 2021 amid China's property sector debt crisis.
• The company faces pressure from the Shenzhen government to repay $2 billion to onshore investors, a sensitive issue for Chinese authorities.
• With $12 billion in offshore debt, Kaisa is the second-largest issuer among developers in China after Evergrande Group.
• Evergrande, facing investigation, was ordered to liquidate by a Hong Kong court in January.
• Kaisa aims to reach a restructuring agreement with bondholders, with Citicorp International acting as petitioner for bondholders.

Current Status and Uncertainties:

• The hearing on Kaisa's winding-up petition has been adjourned multiple times pending progress on the restructuring plan.
• It remains unclear if Kaisa will reach a restructuring agreement with bondholders before the set deadline.
• Kwok has not been detained and is free to move around in Shenzhen, according to sources.
• The sensitivity of the matter has led sources to decline being named in discussions.
• The developer initially aimed to finalize terms by the end of May, as communicated to the Hong Kong court in April.