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[HONG KONG] Kaisa Group Holdings Ltd Chairman Kwok Ying Shing told an offshore bondholder steering committee at a meeting in Hong Kong on Tuesday that he may offer them a better debt restructuring proposal, according to people familiar with the matter.
Mr Kwok said he is considering a few alternatives regarding what to do with the company, but couldn't reveal them until after July 31, the expiration date for Sunac China Holdings Ltd's proposal to acquire the developer, said the people, who asked not to identified because they're not authorised to speak publicly.
Kaisa, based in the southern Chinese city of Shenzhen, is seeking to restructure US$10.5 billion of debt amid a takeover bid that could be valued at as much as US$1.2 billion by rival Sunac.
Mr Kwok resigned on Dec 31 citing health reasons and agreed to sell his family's controlling stake to Sunac in January, only to return to the helm on April 13. Seven days later the company defaulted on two of its dollar bonds.
"It looks like Kaisa and Sunac are competing for the company and for better terms for the bondholders based on recent media reports," said Zhi Wei Feng, a senior credit analyst at Standard Chartered Plc in Singapore. "But there is so much speculation around the situation which has caused lots of volatility in Kaisa bonds. By the end of the day, we still don't have any clarity on what's going to eventually pan out."
Kaisa's US$800 million of 8.875 per cent notes due 2018 rose 1.4 cents to 59.665 cents on the dollar as of 11.18am in Hong Kong, the highest since April 17, according to prices compiled by Bloomberg. Its 9 per cent US$400 million notes due 2019 advanced 1.4 cents, the most in a week, to 59.683 cents.
Frank Chan, an investor relations official at Kaisa, said he wasn't able to comment. Sunac has sought permission from Hong Kong's stock exchange to proceed with its acquisition of a stake in Kaisa even though Kaisa hasn't published audited results for 2014, people with knowledge of the matter said on April 30.
Kaisa's offshore bondholders are waiting to see whether the bourse grants the waiver before presenting a counter-proposal to the developer's debt restructuring plan, said one of the people on April 30, who asked not to be identified discussing confidential information. In March, the steering committee didn't agree to the company's proposed debt restructuring, under which interest payments will be cut and maturities delayed.
Hong Kong listing rules bar companies traded there from making "major" acquisitions where there aren't audited results or accountants' reports available on the target. Buyers can apply for a waiver if they don't plan to make the acquired company a subsidiary, the rules state. Both Sunac and Kaisa are listed in Hong Kong.
A Feb 6 stock exchange statement announcing the stake purchase referred to it as a "major" transaction.
Kaisa shares have been suspended from trading since March 31.