HONG KONG, Dec 8, 2021 (BSS/AFP) - Chinese property firm Kaisa suspended
share trading in Hong Kong on Wednesday as questions swirl over its ability
to make repayments and contagion spreads within the country's debt-ridden
real estate sector.

  The Chinese government sparked a crisis within the property industry when
it launched a drive last year to curb excessive debt among real estate firms
as well as rampant consumer speculation.

  Companies that had accrued huge debt to expand suddenly found the taps
turned off and began struggling to complete projects, pay contractors and
meet both domestic and foreign repayments.

  Kaisa, China's 27th-largest real estate firm in terms of sales but one of
its most indebted, became the latest company to spook investors when it
announced on Friday that it had failed in a bid for a debt swap that would
buy it crucial time.

  On Wednesday morning the firm announced it was suspending trading in Hong
Kong, where it is listed, "pending the release by the Company of an
announcement containing inside information".

  It is the second time the company has suspended trading in the last month.

  Kaisa last month announced a plan to delay the repayment timeline for some
of its bonds, offering an exchange for at least $380 million of notes, which
would have given it some room to find money further down the line.

  But the offer failed to win the 95 percent approval from bondholders needed
for the plan to go ahead.

  The company currently has some $11.6 billion of dollar notes outstanding.
It previously defaulted on a dollar debt in 2015, becoming the first Chinese
developer to do so.

  The most indebted Chinese property firm is Evergrande, which set off the
current confidence crisis earlier in the summer.

  The Shenzhen-based behemoth racked up an eye-watering $300 billion in loans
before Beijing began to rein in the sector.

  - Mega-restructure -

  On Tuesday, Evergrande missed a deadline to repay some of its overseas
creditors, raising the prospect of it defaulting as it prepares for a
government-backed mega-restructure.

  Bloomberg News reported some of the $82.5 million in overdue coupon
payments it owed by the end of Tuesday -- when a 30-day grace period ran out
-- remained unpaid.

  Ratings group S&P have predicted that a default by Evergrande is now
"inevitable".

  Questions have swirled over whether Evergrande is simply too big to be
allowed to fail, given its collapse could send shock waves through the wider
Chinese economy.

  But signs now point to Beijing being willing to close the chapter on the
25-year-old real estate empire that has typified China's breakneck growth in
recent decades.

  After Evergrande said Friday it may not be able to meet its financial
obligations, the government summoned the company's founder and announced
several moves that have given the clearest picture yet of Beijing's plans to
end the crisis.

  A new seven-strong "risk management committee" has been set up to manage
the restructuring. Only two executives from the company are on the committee
-- others include officials from state entities.

  Guangdong's provincial government is also sending a working team to the
company, which analysts at Jefferies said indicated a "potential takeover of
Evergrande".

  Evergrande has yet to comment on the restructuring.

  Kaisa and Evergrande have become the most visible faces of the debt crunch
within China's property sector but defaults have rippled throughout the
sector.

  According to Bloomberg News, at least 10 lower-rated real estate firms have
now defaulted on onshore or offshore bonds since the summer.

  So far this year, Chinese borrowers have defaulted on a record $10.2
billion of offshore bonds, Bloomberg reported, with real estate firms
accounting for 36 percent of those non-repayments.