Kaisa loses directors, gains CEO

Executive director and subsidiary president takes over as chief executive at the Chinese property developer

Two executive directors have resigned from embattled Chinese developer, Kaisa Group Holdings. The resignations were announced in tandem with the appointment of Yi Zheng as chief executive officer (CEO). 

Zheng was already a member of the board of directors and was the president of subsidiary, Kaisa Zhiye Development (Shenzhen) Co., from January 2014 where he focused on operational management. Thirty-four year old Zheng joined Kaisa in July 2007 and now replaces Jin Zhigang who resigned as CEO in February. 

Kaisa Group began struggling with a large debt load towards the end of 2014 and became the first Chinese property developer to officially default on offshore debt in April when it failed to make an interest payment on roughly $1 billion of US dollar bonds within the 30 day cure period, as reported. 

One of the resigning directors is Ye Lieli who was vice chairman of the board. Lieli is resigning to spend more time on his other business commitments, a statement by the firm said. Jin Zhigang also resigned for the same reason, the statement continued. 

Kaisa has been engaging with onshore and offshore creditors to restructure its roughly $10 billion debt pile, which the company revealed is far larger than previously known, as off balance sheet debt commitments emerged. 

The struggling company had found a buyer but that has now fallen through. Sunac China Holdings had agreed to acquire Kaisa in February but the offer was terminated on 26 May. It had been dependent on the successful completion of the restructuring and Sunac warned that its patience was deteriorating in April, as reported.

Law firm Kirkland & Ellis is advising an ad hoc steering committee of bondholders in relation to $2.6 billion of defaulted bonds. Houlihan Lokey is advising Kaisa on its proposed restructuring.