Vanke gets another loan from state-owned shareholder
Authorities are determined to keep property giant Vanke from defaulting.
On Tuesday, Vanke announced that its largest shareholder, state-owned Shenzhen Metro Group, will provide an RMB 1.68 billion loan to cover upcoming bond payments.
- It's Shenzhen Metro’s ninth loan to Vanke this year – and the fourth since early July – bringing total support RMB 24.4 billion.
- Like earlier tranches, the loan offers flexible terms, allowing repayment to be extended beyond the initial three-year maturity.
Vanke won't leave a penny unspent.
- The company has RMB 2 billion in debt maturing this month, and an additional RMB 11.8 billion due by year-end.
Get smart: With revenue still being hammered by the property slump – home sales fell 44% y/y in January–July – ongoing state support is the only thing standing between Vanke and default.
Get smarter: The cost of propping up Vanke may be high, but the damage to homebuyer confidence from a collapse would be higher.
- That means authorities will keep the lifeline open, whatever it takes.