May 23, 2024
Developer Vanke to Get $1.1 Billion of Loans Guaranteed by Units
Bloomberg News
,![A residential building under construction at the China Vanke Co. Elegant Lifestyle project in Shenzhen, China, on Wednesday, April 17, 2024. Vanke, the Chinese state-backed developer that's become the latest flashpoint in the nation's property crisis, is preparing an asset package totaling about 130 billion yuan ($18 billion) to use as collateral as it seeks new bank loans, people familiar with the matter said. Photographer: Qilai Shen/Bloomberg, Bloomberg A residential building under construction at the China Vanke Co. Elegant Lifestyle project in Shenzhen, China, on Wednesday, April 17, 2024. Vanke, the Chinese state-backed developer that's become the latest flashpoint in the nation's property crisis, is preparing an asset package totaling about 130 billion yuan ($18 billion) to use as collateral as it seeks new bank loans, people familiar with the matter said. Photographer: Qilai Shen/Bloomberg](/polopoly_fs/1.2076973.1716538822!/fileimage/httpImage/image.jpg_gen/derivatives/landscape_620/a-residential-building-under-construction-at-the-china-vanke-co-elegant-lifestyle-project-in-shenzhen-china-on-wednesday-april-17-2024-vanke-the-chinese-state-backed-developer-that-s-become-the-latest-flashpoint-in-the-nation-s-property-crisis-is-preparing-an-asset-package-totaling-about-130-billion-yuan-18-billion-to-use-as-collateral-as-it-seeks-new-bank-loans-people-familiar-with-the-matter-said-photographer-qilai-shen-bloomberg.jpg)
(Bloomberg) -- China Vanke Co. said it will receive 7.8 billion yuan ($1.1 billion) of bank loans guaranteed by its units, an effort to “meet business operations needs,” as the cash-strained developer seeks to avoid a default.
Vanke subsidiary Shenzhen Yili Real Estate Development Co. provided a guarantee for a 4.49 billion yuan loan, according to a company filing Friday. Another unit, Shenzhen Zhongke Wanxin Industrial Co., issued a guarantee for a 3.29 billion yuan loan.
The Shenzhen-based company is also applying for a 1 billion yuan loan from banks, to be guaranteed by real estate assets held by a fully owned subsidiary in the city, according to the filing.
Once thought to be among the safer companies in China’s beleaguered property sector, state-backed Vanke is one of the largest developers hit by a slump in property sales and mounting debt. A potential payment default by Vanke could wreak havoc on investors’ and home-buyers’ confidence in the sector.
Vanke’s shares and bond prices have soared in recent days as it has sought to reassure the market with new bank credit lines. A slew of recent funding from Chinese banks has totaled nearly $4 billion — including a 20 billion yuan syndicated loan from banks including China Merchants Bank Co.
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