After China’s property giant Evergrande Group faced a debt repayment deadline, another real estate developer Kaisa Group is at risk of default, escalating fears of further problems in the country’s embattled property sector.
Shares of Kaisa Group, a Shenzhen-based developer, were suspended from trading on Friday in Hong Kong. The company’s subsidiaries, which were also halted from trading, cited a “pending” announcement about the group in stock exchange filings, reported CNN.
While Kaisa did not disclose more details for the reason behind the suspension, it had said the previous day that it was facing “unprecedented pressure” on its finances.
Chinese state-run financial newspaper Securities Times reported Thursday that the company told the outlet about its liquidity issues, and admitted to missing a payment related to its wealth management products.
According to the report, Kaisa said that it was experiencing multiple headwinds, such as a challenging real estate market environment and the recent downgrading of its credit ratings by international agencies, reported CNN.
The news comes as investors continue to fret over the crisis at Evergrande, China’s most indebted developer. The conglomerate has generated international headlines since September, after warning that it could default on its enormous debts of more than USD 300 billion.
Another real estate developer Modern Land is also struggling to pay its debts now. In recent weeks, a slew of developers has disclosed their own cash flow issues, asking lenders for more time to repay them or warning of potential defaults.
Kaisa faced a setback last week as Fitch and S&P Global Ratings both downgraded the company, citing debt concerns.