KAISA Group Holdings, which in April became the first Chinese mainland developer to default on offshore bond coupon payments, has struck a deal with some onshore creditors to unfreeze some of its projects for sale, a company official said yesterday.

    “We’ve reached agreement with some of the onshore creditors, so that we will be able to sell flats to generate income,” said the Kaisa official, who declined to be named due to the sensitivity of issue.

    The Shenzhen-based developer, which has seen most of its assets frozen by court orders on lender requests since January, has resumed sales in at least eight cities, South China Morning Post reported yesterday.

    The eight cities included Nanjing, Hangzhou, Shanghai, Foshan and Chongqing, the report said.

    The unfreezing of the assets, which are held as collateral by the creditors, is another key hurdle cleared for Kaisa to generate income. City authorities in Shenzhen, where the developer has the majority of its assets, have already unblocked most of its development sales in April.

    The firm won a government contract last week to manage a sports center in Foshan, southern China, in a sign that the developer is restoring its relationship with local governments.

    Kaisa owes almost US$11 billion as debt, of which US$2.5 billion is owed to offshore creditors. Fresh questions were raised about its ability to repay the debt after smaller rival Sunac China last month scrapped a US$600 million takeover proposal. Kaisa is yet to issue its 2014 financial results.

    Ratings agency Standard & Poor’s said Thursday it has discontinued its “D” rating for Kaisa because there was not sufficient and timely information available to assess the firm’s credit quality.

    “Kaisa is unlikely to restore normal operations in the near term”, S&P said in a statement. “Moreover, it would be very difficult for Kaisa to regain the confidence of its customers and business partners after the default.” (SD-Agencies)