Guo Yingcheng appears, Kaisa Group embarks on a new path to resolve its debts

```

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

A week ago, Kaisa Group Chairman Guo Yingcheng made a rare appearance at the launch of a real estate project. Since returning to Shenzhen in 2024 to address Kaisa's debt issues, this property tycoon, long based in Hong Kong, has seldom made public appearances, and those have mostly been at events related to culture, sports, or technology.

The Dongjiaotou plot, once Kaisa’s core asset reserve, has now entered the market under the name "CITIC·Xin Yue Bay," which Guo regards as a “diamond treasure.” With the launch of this prime site and Guo’s attendance at the event, it sends a signal that Kaisa is getting back on track.

Just a week later, on December 2, Kaisa announced a proposal to issue new shares at HK$0.5 per share to pay for six US dollar bond coupon payments due between December 2025 and December 2026, involving around US$120 million.

From a financial perspective, this is a measure aimed at preserving cash flow. If approved, Kaisa will substitute equity expansion for cash expenditure, which is expected to reduce approximately HK$933 million in cash outflow.

Industry insiders believe that in the current environment where financing channels have not fully recovered, this is a transaction that can buy the company time. By converting debt into equity, Kaisa not only avoids impending default risks, but also preserves valuable cash for project construction.

This strategic choice objectively reflects Kaisa’s current asset-liability status. According to the 2025 interim results, as of end-June, the Group held RMB 2.17 billion in cash and bank deposits, the majority of which are regulated presale funds prioritizing project delivery. At the same time, short-term debt due within one year amounts to RMB 119.2 billion. Against this backdrop, using financial instruments to relieve immediate payment pressure is in line with the company’s survival logic.

According to the announcement, the proposal requires approval from holders of more than 75% of the principal amount of the debt for implementation. Considering the new share issue price (HK$0.5 per share) is higher than the current secondary market price, this offers creditors a potential exit route, but there remains room for negotiation among parties.

If successfully implemented, this proposal will further reshape Kaisa’s equity structure.

Guo Yingcheng’s stake in Kaisa is expected to adjust further from 8.04% after debt restructuring to 6.5%, while creditors’ combined holdings will reach about 60%. This change indicates that in resolving Kaisa’s risks, Guo is exchanging part of his equity for the company’s ongoing operation.

Previously, Kaisa's offshore debt restructuring plan officially took effect on September 15, marking the company’s legal avoidance of bankruptcy liquidation risk. Through restructuring, Kaisa reduced debt by about US$8.6 billion, with new bonds averaging a 5-year maturity extension and the coupon rate lowered to 5%-6.25%. This means that before the end of 2027, Kaisa faces no rigid principal repayment pressure offshore.

While resolving debt, Kaisa’s operational focus has returned to project delivery and asset revitalization.

Data shows that since 2021, Kaisa has delivered around 120,000 units, demonstrating its execution in “guaranteed delivery.” However, on the sales side, how to accelerate clearance and achieve positive cash flow remains a major challenge.

Currently, Kaisa has adopted pragmatic cooperation models for core project revitalization. Taking “CITIC·Xin Yue Bay” as an example, it is co-developed with the CITIC group. In 2022, Kaisa transferred equity in the project to CITIC, which is responsible for financing and construction.

Under this model, cash flow generated from project revitalization is first used to repay funds supplied by partners, with the remainder flowing back to Kaisa. For Kaisa, while its benefit share is diluted, it leverages central SOE’s credit and capital advantages to restart stalled projects and release value.

An analyst at a foreign investment bank commented that for real estate firms seeking survival, the first step should be restructuring debt to restore normal operations, and then gradually recover market and corporate creditworthiness.

Currently, Kaisa is continuously resolving debt, seeking more room for normalized business operations. This is a key period as the company transitions from debt restructuring to normalized operation.

In addition, in search of new growth, Kaisa is exploring diversified paths, including using platforms like Kaisa Capital to establish businesses around real-world asset tokenization, leveraging fintech to revitalize commercial and cultural tourism assets. Though this field is still under exploration, it reflects the company’s efforts to break through beyond traditional real estate.

Although the deleveraging process remains challenging, compared to those property firms that have exited the stage due to exhausted liquidity, Kaisa has managed to preserve its listed status, stabilize its core management team, and gain valuable time with active self-rescue and restructuring.

For this former "king of urban renewal," the most thrilling moments have passed. Now, working together with central SOEs and other partners, it is bringing stalled projects like "Xin Yue Bay" to market, and must prove the true value of its asset management to the market and convince creditors its stock price can recover from the trough.

Once the old labels are shed, this property enterprise known as the "phoenix" can find a new place in the age of inventory.

Risk Warning and DisclaimerThe market has risks, investment needs caution. This article does not constitute personal investment advice, nor does it consider the unique investment objectives, financial status, or needs of individual users. Users should consider whether any opinion, viewpoint, or conclusion in this article fits their particular situation. Investment based on this article is at your own risk. ```