China Developer Kaisa Drowns In Debt, Pleads For Help

Kaisa Group Holdings needs help to pay investors, workers, and suppliers, the developer told a meeting of a Chinese government think-tank, banks and property firms, according to a source with direct knowledge of the matter, Samuel Shen, Cheng Leng, and Tony Munroe reported for Reuters.

Photo Insert: Kaisa is the 25th largest developer in China based on sales.

China's real estate sector has been hit by a liquidity squeeze, exacerbated by the troubles of China Evergrande Group, the world's most indebted developer. It has resulted in offshore defaults, credit rating downgrades, and sell-offs in some developers' shares and bonds in recent weeks.

Underscoring the crunch, Fitch downgraded Kaisa on Tuesday, citing a deteriorating liquidity situation. The developer said it was trying to solve its liquidity problems and pleaded for more breathing space, Joy Leung and Clare Jim also reported for Reuters.

"We sincerely ask investors to give Kaisa Group more time and patience," it said in a statement on its official WeChat account late on Monday.

Earlier on Monday, Kaisa attended a meeting with the Development Research Center of the State Council, other developers, and lenders in the southern Chinese city of Shenzhen, the source said.

Kaisa, China's 25th largest developer by sales, told those at the meeting it is facing significant difficulties amid rating downgrades and banks curbing loans, the source said.

The developer said some financial institutions had transferred funds from its accounts inappropriately and it urged all lawsuits seeking a freeze of its assets to be handled centrally in a Shenzhen court, the source added.

China's property sector troubles have kept global markets on tenterhooks and led to a string of Beijing officials speaking out in a bid to reassure investors the crisis will not spiral out of control.

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