KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Chinese property developer Kaisa Group announced on Tuesday that it has reached an agreement with a key group of bondholders to restructure its offshore debt. The deal involves swapping existing debt for new notes and shares in the company, marking a significant step in addressing its financial challenges.
Key Highlights:
Debt Restructuring Agreement: Kaisa's restructuring plan covers US$12 billion in offshore bonds that it defaulted on in late 2021, along with other debts including loans and yuan-denominated asset-backed securities. The agreement includes issuing six tranches of senior notes maturing between 2027 and 2032, with cash interest rates ranging from 5% to 6.25%. Additionally, the company will issue eight tranches of mandatory convertible bonds maturing from 2025 to 2032, which will be converted into shares based on a predetermined allocation ratio.
Shareholder Contribution: To facilitate deleveraging and improve liquidity, Kaisa stated that sponsors, including Chairman Kwok Ying Shing, may contribute 115 million yuan (approximately RM70.39 million) as a shareholder loan through one or more rights issues.
Management Incentive Plan: Kaisa may propose a management incentive plan to issue up to 3.33% of ordinary shares to its personnel after the full redemption of a tranche of the new notes.
Bondholder Support: The key bondholder group, representing over 34% of the debt covered in the restructuring and more than 36% of the debt of Kaisa's unit Rui Jing, has agreed to the plan. Kaisa has urged other creditors to sign the agreement by September 12, offering a 0.1% consent fee in the form of Tranche A New Notes as an incentive.
Market Reaction: Shares of Kaisa dropped 1.9% as of 0301 GMT on Tuesday, after gaining more than 10% in early trading. The Hang Seng Mainland Properties Index also fell by 2%.
Winding-Up Petition: Kaisa is scheduled to face a winding-up petition hearing in Hong Kong on September 9. Reaching a debt restructuring agreement is crucial for Kaisa as it could help the company push back against the petition. The bond trustee representing the key bondholder group has acted as the petitioner since March, after the original petitioner withdrew.
Outlook: Kaisa’s agreement with bondholders is a significant step in its efforts to navigate the ongoing debt crisis that has affected many Chinese property developers. If the restructuring plan is successfully implemented, it could provide Kaisa with the necessary stability to manage its debts and potentially restore investor confidence. However, the company still faces challenges, including the upcoming winding-up petition, and will need continued cooperation from creditors to fully execute its plan.
Comments
Post a Comment