China"s Kaisa Group Holdings Ltd (1638.HK) said on Friday it had failed to secure the minimum 95% approval needed from its offshore bondholders to extend the maturity of a $400 million note that is due next week, raising the risk of a default. The embattled property developer last week announced its offer to exchange its 6.5% offshore bonds due Dec. 7 for new notes due June 6, 2023 at the same interest rate if at least 95% of holders accepted. Kaisa in a filing did not disclose how many bondholders had consented to the offer, but said as the minimum acceptance had not been met, "the exchange offer and consent solicitation will not proceed and shall lapse automatically." The failure makes Kaisa defaulting on its debt obligation next week a high possibility, which would be its second and will add to the string of defaults in the Chinese property sector currently in the grip of an unprecedented liquidity squeeze. The firm, which became the first Chinese property developer to default on its dollar bonds in 2015, said it had been in talks with representatives of certain bondholders, but no "legally binding agreement" had been entered into yet. "To ease the current liquidity issue and reach an optimal solution for all stakeholders, the company is assessing and is closely monitoring the financial condition and cash position of the group," it said. However, there was no guarantee Kaisa would be able to meet the repayment obligations at maturity on Dec. 7, it said, adding its failure to repay or reach an agreement with creditors would have "a material adverse effect" on its financial condition. Kaisa, like many other Chinese developers facing a liquidity squeeze, has been scrambling to raise capital by divesting assets including Hong Kong-listed property management unit, Kaisa Prosperity Holdings Ltd (2168.HK). Last week, in its notes exchange offer Kaisa had said that it could consider a debt restructuring exercise if bondholders did not approve the extension of maturity by 18 months. Kaisa"s failure in getting a much-needed lifeline from its creditors will also weigh on other smaller developers that are looking to avoid long and messy litigation and restructuring processes, analysts have said. Some developers in late October called on regulators to allow them to extend their offshore bond maturities or undertake a debt restructuring, as a growing number of defaults hit the sector amid the broad fallout from China Evergrande Group"s (3333.HK) troubles. Evergrande, which has more than $300 billion in liabilities, failed to pay coupons totalling $82.5 million due on Nov. 6 and investors are on tenterhooks to see if the developer can meet its obligations before a 30-day grace period ends on Dec 6.