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The management clarified that the recent proposal to provide shareholder loans to Vanke and require collateral is merely part of the routine process to secure shareholder approval and finalize pledge arrangements, as outlined in existing agreements.
During a recent shareholders’ meeting, Vanke’s representatives addressed market speculation suggesting that Shenzhen Metro’s move might signal an end to liquidity support. The company’s documents reveal that Shenzhen Metro has extended loans totaling up to 220 billion RMB (around 31 billion USD) within the year, primarily to help Vanke settle principal and interest payments on public bonds, along with other agreed-upon expenses.
Currently, the rail transit operator has provided approximately 213.8 billion RMB in unsecured loans. Vanke is expected to furnish collateral for these loans; otherwise, Shenzhen Metro retains the right to demand early repayment of both principal and interest.
Some market observers viewed the move as an attempt by Shenzhen Metro to secure collateral, potentially signaling a winding down of its liquidity support. In response, company management emphasized that the loan agreements already contain these collateral requirements, with relevant measures outlined in previous disclosures. They reassured stakeholders that Vanke is complying with its contractual obligations and that asset pledging is a standard, market-oriented, and legally compliant practice.
Executives further explained that the company is seeking shareholder authorization to complete collateral procedures. To quickly address funding needs and avoid delays associated with obtaining joint approval, the major shareholder has already advanced part of the necessary funds. The formal request for collateral approval is aimed at completing the legal and procedural steps required for the pledge.
Last month, Huang Liping, who assumed the role of chairman, noted that Vanke must navigate a period of adjustment as it manages past liabilities. He highlighted that the company faces significant challenges and ongoing pressure on its operational performance. As the primary stakeholder, Shenzhen Metro is committed to working with all parties to help Vanke mitigate risks, overcome obstacles, and restore healthy growth.
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