HONG KONG - A Hong Kong court on Monday adjourned a hearing on a petition seeking the liquidation of Kaisa Group until June 24, giving the embattled Chinese developer some respite as it works on its debt restructuring plan.

The Shenzhen-based developer has been working to restructure its offshore debt for two years after defaulting on $12 billion in offshore debt in late 2021.

The matter before the court concerns the non-payment of 2023 notes with an outstanding principal of $750 million. Citicorp International, the trustee of a major group of bondholders, has been acting as petitioner since March after a former petitioner withdrew.

The reason for the adjournment was not disclosed. A spokesperson for Kaisa said they were discussing specific terms of the restructuring plan with the bondholder group.

Kaisa shares surged nearly 6% in early Hong Kong trade on the news but later gave up most of those gains and were last up 1.3%.

Kaisa is China's second-largest issuer of offshore debt among property developers after China Evergrande Group and was the first Chinese property developer to default on its dollar bonds in 2015.

China Evergrande was ordered to liquidate by a Hong Kong court earlier this year and a growing list of companies in the sector, including Country Garden, are fighting against liquidation petitions filed by creditors.

In March, Kaisa reported a net loss of 19.7 billion yuan ($2.7 billion) for 2023, roughly 50% larger than its loss a year earlier. It had total liabilities of 226 billion yuan at the end of last year and total assets of 233 billion yuan.

The company said at the time it would continue to work on delivering a holistic debt restructuring plan as soon as practicable.

China's property sector has been grappling with a severe debt crisis since 2021 - initially triggered by government moves to rein in ballooning debt. Since then, scores of developers have defaulted on bond payments, leaving construction sites idle and devastating confidence in the market.

Waves of government support measures over the past two years have failed to put a floor under property prices. Beijing this month announced what it called "historic" measures to support the sector, aiming to clear inventory and boost home buyer demand.

($1 = 7.2450 Chinese yuan)

(Reporting by Xie Yu; Editing by Anne Marie Roantree and Edwina Gibbs)