A group of bondholders in debt-laden Chinese developer Kaisa Group Holding, including Farallon Capital and BFAM Partners, have drawn up a debt restructuring plan even as the company pushes ahead with its own proposal, a source close to the two funds said on Friday.
The bondholders proposal, which follows one launched by the company last month, had some additional benefits for investors with respect to the coupon, conversion price for the convertible bonds, collateral and capital buffer, the source said, without elaborating.
“We have presented a counter-proposal based on the company’s current terms which we do not believe introduces additional execution risk or complexity,” said BFAM Partners Chief Investment Officer Benjamin Fuchs.
“Our proposed terms provide a better outcome for bondholders and we believe they will gain widespread support.”
The source said the latest proposal offered bondholders a net present value of 87 percent versus the 75 percent offered by the company’s own proposal, besides providing better security and certainty of debt servicing.
Earlier this week, Kaisa, the first Chinese property developer to miss debt payments to overseas creditors, offered a one-off payment to creditors that consent to its debt restructuring proposal, sweetening an offer made two weeks earlier.
The Shenzhen-based developer owes around $2.5 billion to offshore creditors out of almost $11 billion worth of debt.
An email to the company seeking comment on this proposal was unanswered.