A think-tank of China’s powerful state council had a meeting with real estate developers and banks in Shenzhen city on Monday, Nov. 8, amid increasing worries over a liquidity disaster in the country’s property sector; Reuters cited a source with direct knowledge of the issue.
China Vanke, Kaisa Group, Ping An Bank, China Citic Bank, China Construction Bank, and CR Trust attended the meeting, said the source.
A big developer in great trouble
At the meeting with the Development Research Center of the State Council, Kaisa, China’s 25th largest developer by sales, urged state enterprises to help improve the liquidity of private firms through project acquisitions and strategic buys, Reuters added.
Kaisa said it confronts significant difficulties amid rating downgrades and banks curbing loans, and its liquidity is tight. Kaisa has the most offshore debt of any Chinese developer, after Evergrande.
The Shenzhen-based developer disclosed that some financial institutions had inappropriately removed funds from its accounts. It urged all lawsuits seeking a freeze of its assets to be tackled centrally in a Shenzhen court.
Last week, Kaisa and three of its units had their shares suspended from trading a day after an affiliate missed a payment to onshore investors.
Upcoming deadlines for Evergrande
Debt-laden behemoth China Evergrande Group with liabilities of more than $300 billion, has worried investors worldwide. Some holders of offshore bonds issued by a unit of Evergrande had not received interest payments due on Nov. 6 by Monday evening in Asia, Reuters reported.
Twice in October, Evergrande narrowly staved off disastrous defaults on its $19 billion worth of bonds in international capital markets by paying coupons just before their grace periods expired.
One such period expires on Wednesday, Nov. 10, for more than $148 million in coupon payments that had been due on Oct. 11. Evergrande is also due to make coupon payments amounting to over $255 million on its June 2023 and 2025 bonds on Dec. 28.
On Tuesday, shares of Evergrande fell more than 1%.
At the meeting, Vanke, one of China’s top three developers, said its financials were healthy, although it called for stable policies to avoid systemic risks and a liquidity crunch.
Reuters highlighted that while the think-tank makes policy proposals, it is not a decision-making body.
Other companies attending the meeting were Southern Asset Management and developer Excellence Group, the source—who asked to stay anonymous due to the matter’s sensitivity—added.