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Shares of China Vanke edged lower after the property developer announced that its largest shareholder, Shenzhen Metro Group, will provide an additional 1.7 billion yuan (approximately $233 million) loan—marking the eighth loan of this kind this year—to assist in debt repayment.
As of 10:30 a.m., Vanke’s stock traded down 0.8% at 6.40 yuan ($0.89), reflecting a 15.2% decline for the year. The new three-year loan comes with an interest rate of 2.34%, which is lower than the one-year loan prime rate of 3%, according to a statement released yesterday. The funds will be used to service existing bonds issued in the open market, as well as other debts.
During the first half of the year, Vanke secured a total of 24.9 billion yuan (about $3.5 billion) in new funding and refinancing, with approximately 24.4 billion yuan obtained from Shenzhen Metro since February 10. The shareholder owns a 27.2% stake in the company.
The company highlighted that the interest rate reflects market standards and remains lower than the rates paid on loans from financial institutions, emphasizing the significant support from Shenzhen Metro. It also assured that this transaction does not undermine the interests of minority investors or the company’s financial health, nor will it negatively impact operating results.
As of the end of last year, Vanke’s liabilities totaled 1.1 trillion yuan (around $153 billion), with an asset-liability ratio of 73.7%. Its interest-bearing liabilities reached 361.3 billion yuan ($50.3 billion), with 44%, or 158.3 billion yuan, classified as short-term debt due within a year.
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