Guo Yingcheng appears, KAISA GROUP embarks on a new path to debt resolution

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

A week ago, Kaisa Group Chairman Guo Yingcheng made a rare appearance at a real estate project launch event. Since returning to Shenzhen in 2024 to address Kaisa's debt issues, this real estate tycoon, who has long been based in Hong Kong, has seldom appeared in public, with his few appearances mostly at cultural, sports, and technology events.

As Kaisa's former core asset reserve, the Dongjiao Head land parcel is now being launched under the name "CITIC·Xinyue Bay," which Guo Yingcheng regards as a "diamond land." With the precious land now on the market and Guo Yingcheng attending the launch 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 a price of HKD 0.5 per share to pay the interest on six U.S. dollar notes due between December 2025 and December 2026, involving an amount of approximately USD 120 million.

From a financial logic perspective, this is a move aimed at preserving cash flow. If the proposal is approved, Kaisa will replace cash expenditures with equity expansion, expected to reduce cash outflows by approximately HKD 933 million.

Industry insiders believe that, given the current financing environment has not fully recovered, this is a transaction that can buy time for the company. By converting debt into equity, Kaisa not only avoids the imminent risk of default but also retains valuable cash for project construction.

This strategic choice also objectively reflects Kaisa's current asset-liability situation. According to the mid-2025 performance report, as of the end of June, the group held cash and bank deposits of RMB 2.17 billion, most of which were regulated pre-sale funds that need to be prioritized for project delivery. During the same period, the company faced short-term debts maturing within one year amounting to RMB 119.2 billion. In this context, alleviating immediate payment pressure through financial instruments is a move that aligns with the logic of corporate survival.

According to the announcement, the proposal requires the consent of creditors holding more than 75% of the principal amount to be implemented. Considering that the new share issuance price (HKD 0.5) is higher than the current secondary market price, this provides creditors with a potential exit path, but also leaves room for negotiation among parties.

If this proposal can be successfully implemented, it will further reshape Kaisa's equity structure.

Guo Yingcheng's shareholding in Kaisa is expected to be adjusted from 8.04% after the debt restructuring to 6.5%, while the total shareholding of creditors will reach approximately 60%. This change indicates that, during the risk resolution process at Kaisa, Guo Yingcheng is exchanging part of his equity for the company's continued operation.

Previously, Kaisa's offshore debt restructuring plan officially took effect on September 15, marking the company's legal avoidance of bankruptcy liquidation risks. Through restructuring, Kaisa achieved a debt reduction of approximately USD 8.6 billion and extended the average maturity of new notes by five years, with coupon rates reduced to 5%-6.25%. This means that before the end of 2027, Kaisa will not face rigid principal repayment pressure offshore.

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

Data shows that from 2021 to the present, Kaisa has delivered approximately 120,000 housing units, reflecting its execution capability in "ensuring delivery." However, on the sales side, how to accelerate inventory turnover to achieve positive cash flow remains the main challenge facing the company Currently, KAISA GROUP is adopting a pragmatic cooperation model for revitalizing its core projects. Taking the recently launched "CITIC·Xinyue Bay" as an example, this project is developed in collaboration with the CITIC Group. In 2022, KAISA GROUP transferred the project equity to the CITIC Group, with CITIC Urban Development responsible for financing and construction.

Under this model, the cash flow generated from the revitalization of related projects will first be used to repay the capital invested, with the remaining portion flowing back to KAISA GROUP. For KAISA GROUP, although the equity returns are somewhat diluted, this approach leverages the credit and funding advantages of state-owned enterprises to restart stalled projects and release their value.

An analyst from a foreign investment bank stated that for real estate companies to get back on track, they should first lay the foundation for their operations through debt restructuring, and then gradually restore their market credit and corporate credit.

Currently, KAISA GROUP is seeking more space for its operations to return to normal through continuous debt management. This will be a critical period for KAISA GROUP's transition from debt restructuring to normalized operations.

In addition, to find new growth points, KAISA GROUP is also exploring diversification paths, including laying out businesses such as real-world asset tokenization through platforms like KAISA Capital, attempting to utilize financial technology to revitalize commercial and cultural tourism assets. Although this field is still in the exploratory stage, it reflects the company's attempts to seek breakthroughs beyond traditional real estate business.

Although the process of deleveraging remains challenging, compared to those real estate companies that have already exited the stage due to liquidity exhaustion, KAISA GROUP has successfully maintained its listing status, stabilized its core management team, and gained valuable time through debt restructuring.

For this former "king of urban renewal," the most thrilling moments have passed. It is now working with state-owned enterprises and other partners to push stalled projects like "Xinyue Bay" to the market, and it needs to prove the real value of its asset management to the market, convincing creditors that its stock price can emerge from the trough.

Once the old labels are removed, this real estate company, known as the "Phoenix," can also find its new coordinates in the era of existing stock