SHENZHEN-BASED property developer Kaisa Group Holdings Ltd. warned Friday that it may default on more debt after it failed to repay a HK$400 million (US$51.3 million) loan, the latest developer to flag financial difficulties amid a downturn in the real estate sector.

    Kaisa, which has a market capitalization of HK$8.2 billion, is one of the smaller listed property firms on the mainland, where a credit crunch and excess supply are putting pressure on a sector once key to economic growth.

    Last year, Agile Property Holdings Ltd. suffered debt financing problems and some of its executives were detained.

    Kaisa currently has a net debt-to-EBITDA ratio of 5.4, above the 3.4 average ratio of its peers. EBITDA, or earnings before interest, tax, depreciation and amortization, is often used as a proxy for cash flow.

    The Hong Kong-listed firm said it had received a notice from HSBC to repay the loan and interest by Dec. 31. The demand for repayment was mandatory pre-payment provision triggered by the resignation of Kwok Ying-shing as chairman. The failure to repay the HSBC term loan may trigger defaults on other debt, it said.

    Analysts, however, said the fact that the company did not ask for an extension to repay the loan, as is common practice in such cases, raised concerns about Kaisa’s strategy.

    In the past month, the authorities blocked the sale of some projects in Shenzhen, which research firm CreditSights estimated to be worth about a fifth of Kaisa’s overall book value. The firm’s vice chairman and chief financial officer also resigned. (SD-Agencies)