NEW YORK (The Deal) -- Chinese property developer Kaisa Group Holdings said that talks with a committee representing the holders of more than 50% of its bonds are continuing after the bondholders rejected its restructuring proposal as unfair.

"The bondholder group has indicated its willingness to work constructively with the company and it plans to engage a financial adviser," Kaisa said in a stock market filing published March 22. "The ... current liquidity situation requires that the relevant parties quickly agree to the terms of any revised proposal."

Shenzhen-headquartered Kaisa can't meet payments on its roughly $2.5 billion of loans and is running low on cash after legal action by domestic creditors and a local government froze many of its assets, leaving it unable to sell properties or access much of its cash. Kaisa's loans include about $138 million of foreign loans from creditors including HSBC Holdings (HSBC) and Industrial and Commercial Bank of China (IDCBF), as well as offshore convertible notes and senior debt.

Kaisa warned this month that it will collapse if it can't finalize a takeover by Hong Kong-listed property developer Sunac China Holdings. That deal is, in turn, dependent on an agreement on the debt restructuring.

The company owns 23.55 million square meters of land across 29 Chinese cities and develops housing and commercial properties.

Kaisa has asked its convertible bondholders to extend maturity dates by five years to December 2020 and accept a new coupon rate of 2.7%, down from 8%. It has also asked the holders of 2016 high-yield notes to push their maturity date back to 2021 and cut their coupon rate to 2.1%, from 6.88%.

The bondholders rejected the offer on Friday, labeling the deal "very unfair", according to a Reuters report that cited the creditor group's law firm Kirkland & Ellis.

The restructuring requires the support of the holders of more than 50% by value of Kaisa's high-yield debt and more than 66% by value of its convertible bonds. If a deal can't be reached, the company would become China's first property developer to default on offshore loans.

Kaisa has warned that its offshore creditors can expect to recoup just 2.4% of the face value of their loans in the event that the company is forced into liquidation.

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