‘SILVER LINING’ FOR TROUBLED KAISA
Property developer says it plans to release 2014, 2015 results by the end of this month after completing other trading requirements
Troubled Chinese property developer Kaisa Group, whose shares have been suspended from trading in Hong Kong for almost two years, said it aimed to release its 2014 and 2015 annual results by the end of March, clearing the last hurdle for resumption of trading.
“We plan to announce the financial results from 2014 to 2016 first half, by the end of March,” Tam Lai Ling, a senior adviser and former vice chairman of Kaisa, told the Post in a phone interview yesterday. “The company has achieved other conditions for resumption [of share trading] and publishing the financial results is the last step,” he said.
The developer, which in 2015 became the first Chinese developer to default on its US dollar-denominated bonds, has been struggling to restructure its 65 billion yuan (HK$73.4 billion) debt, prepare delayed financial statements, and improve the percentage of shares owned by the public, in a bid to resume trading.
On February 23, Hong Kong billionaire Francis Choi Cheeming bought a 4.23 per cent stake in Kaisa for 5 billion yuan through Da Chang Investment Company, bringing his combined holding to 5.21 per cent.
The deal helped Kaisa remain within the listing requirement that the public control no less than 25 per cent of listed shares.
“I have been friends with chairman Kwok for many years,” said Choi in a telephone interview. The tycoon said he has strong confidence in Kaisa’s prospects given that it owns a number of prime property assets in China.
Choi paid HK$2.3 per share for 217 million shares, a nearly 50 per cent premium from Kaisa’s final closing price on before the suspension of trade.
Kaisa appointed Fok Hei Yu as independent non-executive director on February 28 to meet the minimum three independent non-executive directors requirement under listing rules. Tam added that the company has completed domestic and offshore debt restructurings.
Once the financial statements have been submitted, the Securities and Futures Commission will rule on whether the company can resume trading. Trading of the Shenzhen-based developer has been halted since March 2015 when it delayed the publication of its 2014 annual results.
Chairman Kwok Ying-shing resigned on December 31, 2014 amid suspected links to Jiang Zunyu, a high ranking official in Shenzhen who has been under investigation by the Communist
Party’s Central Commission for Discipline Inspection since October 2014.
Shenzhen officials imposed a sales ban on some of Kaisa’s projects in late 2014 owing to potential business irregularities.
Kaisa was on the verge of bankruptcy due to liquidity crunch. PWC resigned as auditor of Kaisa last year, saying it wasn’t able to obtain information about a number of unusual transactions.
In December, Kaisa said that its advisor FTI Consulting had found that it did not disclose a 35.2 billion yuan outstanding loan to PwC, which led to significant accounting errors.