News & Insights

Takeover unlikely to solve troubled developer Kaisa Group Holdings’ problems

Rhoda Yung recently commented on Hong Kong takeover rules in relation to Kaisa Group Holdings’ future to Bloomberg.

Kaisa Group Holdings’ $500 million of 10.25 percent 2020 notes jumped 18.6 cents to 80.1 cents on the dollar, the highest since Dec. 19, as of 2:55 p.m. in Hong Kong after sinking to 29.9 cents earlier this month. The debentures’ 30-day historical volatility soared to 240 percent, the most on record.

The article discussed a takeover as a potential solution to the company’s problems. However, according to Bloomberg, it’s unlikely that a white knight can rescue Kaisa without bumping up against the city’s takeover rules.

Rhoda explained: “The acquisition of all the shares of a listed company can be effected either by way of a general offer followed by a compulsory acquisition or, with the cooperation of the listed company, by a scheme of arrangement. Once an acquirer becomes the 100 percent owner of a listed company, it will usually apply for withdrawal of the listing."

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Rhoda Yung

Partner | Corporate Finance

Email or call +852 2825 9624

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