Chinese developer Kaisa calls for support and “patience” as the sector’s debt rises.

SHANGHAI / BEIJING (Reuters) – Kaisa Group Holdings said it needs help paying investors, employees and suppliers at a meeting of Chinese government think-tanks, banks and property companies, according to a source with direct knowledge of the issue.

China’s real estate sector has suffered from tight liquidity, and the China Evergrande Group has been exacerbated by the problems of the world’s most indebted developer. This has affected offshore defaults, lower credit ratings and sales in recent weeks for some developer shares and bonds.

Underlining the crisis, Fitch lowered the Kaisa on Tuesday, citing a deteriorating liquidity situation. The developer said it was trying to solve its liquidity problems, advising investors on wealth management products about better payment solutions and demanding more breathing space.

“We sincerely urge investors to give the Kaisa Group more time and patience,” he said in a statement to the official WeChat account on Monday night.

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

Thought makes policy proposals for China’s national development and economy, but it is not a decision-making body.

At the meeting, the Shenzhen-based Kaisa called on state-owned companies to help private companies improve their liquidity through strategic purchasing and purchasing projects, the source added.

The meeting was attended by China Vanke, Ping An Bank, China Citic Bank, China Construction Bank (OTC :), CR Trust, Southern Asset Management and developer Excellence Group, according to the source.

Kaisa, China’s 25th-largest developer, said sales are experiencing major difficulties at the meeting because of lower ratings and reduced bank lending, the source said.

The developer said some financial institutions had improperly transferred funds from his accounts and asked that all lawsuits seeking to freeze his assets be managed centrally in a Shenzhen court, the source added.

Kaisa, Vanke and Citic Bank declined to comment. Excellence and the other banks that attended the meeting did not immediately respond to requests for comment.

The Information Office of the Council of State also did not respond to the request for comment. He refused to identify the source because of the sensitivity of the subject.

Problems in China’s real estate sector have kept global markets locked, and Beijing officials have spoken out to investors to ensure the crisis does not get out of control.

Underlining global concerns about the situation, the U.S. Federal Reserve on Monday said in its latest report on financial stability in China’s real estate sector that it was partly caused by the regulatory focus of leverage institutions as well as tightening global financial conditions. It poses some risks to the US financial system.

FOLLOWING DEADLINES

The shareholding of the fund, which has sought to sell some of its assets to raise money, was disrupted last week by three of its units, one day after an affiliate lost a payment to land investors.

Kaisak has the largest offshore debt of any Chinese developer, after Evergrand.

Evergrande is dealing with more than $ 300 billion in liabilities and, if left unmanaged, could pose systemic risks to China’s financial system.

Beijing has encouraged government companies and state-sponsored real estate developers to buy some of Evergrand’s assets, people familiar with the matter told Reuters.

Holders of offshore bonds issued by an Evergrande unit did not receive any interest payments on Nov. 6 for Monday afternoon in Asia.

Twice in October, Evergrande averted $ 19 billion worth of bond values ​​in international capital markets by paying off coupons before their grace periods expired.

That deadline ends Wednesday, Nov. 10, with more than $ 148 million in coupons paid on Oct. 11. Evergrand is also expected to make coupon payments of more than $ 255 million in December 2023 and June 2025 bonds in December. . 28.

Shares of Evergrand rose 4% on Tuesday.

In contrast, shares of small developer China Aoyuan rose more than 6%.

Infini Capital told Reuters on Tuesday that it had accumulated shares in China’s Aoyuan property management unit in recent weeks, making Aoyuan Healthy Life Group its second largest shareholder.

Aoyuan Healthy said it was in preliminary discussions with several independent third parties last week about removing a stake in certain units.

Infin said Aoyuan Healthy expects to sell the entire company rather than its assets.