Kaisa is working to restructure its offshore debt after missing some debt obligations last year. With $12 billion of offshore debt, it is China's largest issuer of offshore debt among developers after China Evergrande Group.

Kaisa has been talking to its creditors to formulate a restructuring plan since late last year and this will mark the first time the company will put forward a plan to bondholders.

The restructuring plan will propose repaying dollar debt principals in instalments, the people said. One of them said that Kaisa planned to propose swapping part of its debt into shares in the company or its development projects.

Kaisa plans to kick off negotiation with a group of offshore creditors represented by investment bank Moelis & Company in late September, this person said, in which discussions will focus on a framework for the plan, with details to be decided later on.

"Actual execution won't be until year-end to first quarter next year," the person said.

Kaisa declined to comment. Moelis did not immediately respond to request for comment.

China's ruling Communist Party will hold its five-yearly congress beginning on Oct. 16, which is seen by some in the property sector as an event that could roll out more supportive measures to avert a housing slump and revive the economy.

Such measures could improve the outlook for the sector for creditors and investors.

(Reporting by Clare Jim; Editing by Jane Merriman)