HONG KONG (Reuters), The cash-strapped Kaisa Group has entered into a strategic agreement of co-operation with the state-owned China Merchants Shekou Industrial Zone Holdings, and China Great Wall Asset Management for joint venture agreements and asset acquisitions.

Analysts suggested that Kaisa’s actions could serve as a template for others, like China Evergrande Group (China Evergrande Group) and Shimao Group (Shimao Group), to create state-owned entities or local governments in their restructuring.

As Beijing intensifies its efforts to stabilize and control the troubled property sector that accounts for 25% of China’s economy, Chinese state-owned companies are likely to purchase more assets from private developers.

Kaisa announced in a Tuesday filing that new possibilities in Greater Bay Area property development will be available, along with other businesses like cultural tourism and ferry.

In a filing, the firm stated that the agreement was “conducive… to… revitalising its (its] assets of residential and commercial projects, and alleviating short term liquidity difficulties.”

After defaulting last year on bonds, Kaisa is restructuring its offshore debt of $12 billion.

China Merchants Shekou, the flagship company of China Merchants Group specializes in the creation of industrial and commercial areas, while China Great Wall is the nation’s largest manager of distressed debt.

Raymond Cheng from CGS-CIMB Securities stated that “This restructuring is the most significant announced so far by a developer and we believe market should view it as positive since this should pave way for the smooth resolution of its problems.”

Kaisa has had its shares suspended from trading in Hong Kong since April 1, as per listing rules, because Kaisa could not publish 2021 financial results before the March 31 deadline.