Kaisa(-Ga) Group: Through Fire and Brimstone
Kaisa Group (“Kaisa”) will probably go down in history as one of the most curious situations in the market. In our view, the company can certainly hold the infamous title of being the only Chinese property developer (at this point in time) to willingly default in the offshore debt markets, despite the fact that other Chinese developers have come close in the past.
To recap, Kaisa was a fine operating company until the company was questionably caught up in President Xi’s nationwide corruption probes. As such, the surprise investigation caught the market unawares and involved numerous vested interests from company contractors, suppliers, government agencies, banks and customers (who nearly rioted outside showrooms in the past).