Latest news with #ShenzhenMetroGroup
Business Times
6 days ago
- Business
- Business Times
China Vanke seeks to extend some bank loans by up to 10 years
[BEIJING] China Vanke is seeking to extend some of its domestic bank loans by as much as 10 years, according to sources familiar with the matter, a move that could help the state-backed developer reduce liquidity risks. The Shenzhen-based builder, one of China's largest by contracted sales, has made a preliminary proposal to several major Chinese banks in recent weeks for the extension, according to the sources, who asked not to be identified as the matter is private. While some banks are still evaluating the plan, others are reluctant to agree until they get further guidance from regulators, the sources added. Such long-term extensions could offer the company some breathing room on its repayment obligations. Vanke, which has been pummelled by China's prolonged property slump, recently said that its first-half loss may widen to as much as US$1.67 billion, underscoring its financial challenges. China's financial regulators have pledged to step up support for real estate financing, though banks have been constrained by worsening profitability and concerns over a resurgence in bad debt. Commercial banks' net interest margin dropped to a record low of 1.43 per cent at end of March. The measure has been below the 1.8 per cent threshold that helps maintain reasonable profitability for more than two years. Total non-performing loans in the banking system reached a record 3.4 trillion yuan (S$609 billion) as at the end of March. While extending or restructuring some of these troubled loans may help contain headline bad debt figures and temporarily cushion the impact on bank profits, it risks obscuring the extent of asset quality deterioration, potentially leading to more severe consequences in the long run. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Vanke had about 361 billion yuan of interest-bearing borrowings as at last year, 43.8 per cent of which will mature within 12 months, according to its latest annual report. The majority of those were bank loans, which accounted for 257.9 billion yuan of Vanke's total liabilities. The company did not immediately respond to a request for comment. Chinese officials have taken a number of steps to stabilise Vanke's operations and finances since the start of this year. Some of the firm's dollar bonds fell about 40 per cent to deeply distressed levels in January before an official from Shenzhen Metro Group, its largest shareholder, took over as chair and local governments vowed to 'pro-actively support' Vanke's operations. The state-owned shareholder has since offered multiple loans totalling more than 15 billion yuan so far this year, according to data compiled by Bloomberg. Early this month, Vanke said it would apply for another loan of as much as 6.25 billion yuan from Shenzhen Metro. Excluding shareholders' loans, Vanke said in a filing this week that it had secured 24.9 billion yuan of new financing and refinancing during the first half, and had successfully completed repayment of 16.5 billion yuan in public debt. No offshore public debt is due before 2027, it added. BLOOMBERG
Business Times
7 days ago
- Business
- Business Times
China Vanke says first half loss may widen to US$1.67 billion
[LONDON] China Vanke said its loss for the first half of 2025 could reach as high as US$1.67 billion, underscoring the lingering problems in the nation's property market. Vanke reported a preliminary net loss for the period of 10 billion yuan to 12 billion yuan, according to a filing with the Hong Kong stock exchange on Monday (Jul 14). The estimated loss widened from 9.9 billion yuan for the same period last year. Sales revenue was 69.1 billion yuan. The loss partly stemmed from a significant decline in the scale of its real estate project settlements, while gross profit margins remained at a low level, Vanke said. The developer also cited additional provisions for asset impairment. 'The company deeply apologises for the performance loss and will continue to make every effort to promote business improvement,' Vanke said. China's property sector is mired in a protracted slump. Over the past four years, a number of major developers have defaulted on their debt as government crackdowns and faltering home-buyer sentiment have weighed on their businesses. Officials have taken a number of steps to revive the sector, but these have so far had only modest success. Home sales extended their slump in June, spurring calls for fresh stimulus. Vanke, known across the country for building homes in China's largest cities, had been struggling financially with debt repayments as home sales tanked. In early 2025, the local government of Shenzhen stepped in to take management control of Vanke and vowed to 'proactively support' its operations. Its state-backed shareholder, Shenzhen Metro Group, has been providing financing since February to support the troubled builder. Excluding shareholders' loans, Vanke had secured 24.9 billion yuan in new financing and refinancing during the first half of 2025, and had successfully completed the repayment of 16.5 billion yuan in public debt. No offshore public debt is due before 2027, it said. BLOOMBERG
South China Morning Post
30-04-2025
- Business
- South China Morning Post
Vanke's first-quarter loss deepens to US$860 million despite Shenzhen Metro Group rescue
China Vanke's first-quarter loss widened, underscoring the property developer's challenges even after the government in its hometown of Shenzhen stepped in to take control of operations. Advertisement The company reported a net loss of 6.25 billion yuan (US$860 million) in the three months ended in March, steepening from a 362 million yuan loss a year earlier, according to a Hong Kong exchange filing on Tuesday. The loss stemmed mainly from declines in home settlements and gross margins, Vanke said. Margins dropped to 6.1 per cent from about 10 per cent last year, according to Bloomberg calculations on reported figures. As part of a government-led overhaul in January, Vanke's two top executives stepped down and an official from Shenzhen Metro Group, its largest state shareholder, took over as chair. 10:57 Boom, bust and borrow: Has China's housing market tanked? Boom, bust and borrow: Has China's housing market tanked? The loss followed significant write-offs in the final quarter last year. Bloomberg Intelligence (BI) said Vanke's contracted sales risk dropping 30 per cent this year due to weakening buyer confidence and a shrinking supply pipeline, according to a note earlier this month.
South China Morning Post
11-02-2025
- Business
- South China Morning Post
China Vanke secures US$383 million lifeline from top shareholder
Indebted mainland developer China Vanke has secured a funding guarantee from its main state-backed shareholder to repay loans, indicating further support from the government following a management reshuffle. Shenzhen Metro Group, which holds a 27.2 per cent stake, signed a three-year agreement with Vanke to provide secured loans of up to 2.8 billion yuan (US$383 million), according to a filing to the Hong Kong stock exchange late on Monday. Vanke will provide assets of up to 4 billion yuan as collateral to Shenzhen Metro Group via an 18 per cent stake transfer in its property management unit Onewo. The loan facility, with a floating rate of 76 basis points below the one-year loan prime rate, or 2.34 per cent as of Monday, would be used to repay and settle Vanke's outstanding debts, according to the filing. The loans would be repaid on a quarterly basis. China Vanke's residential project in Hangzhou, east Zhejiang province, is seen under construction in this file photo from May 2024. Photo: AFP The arrangement 'fully reflects Shenzhen Metro Group's support for the company', Vanke said, adding that it 'would be the most effective way to raise funds for the group'.
Yahoo
28-01-2025
- Business
- Yahoo
Vanke's No. 1 investor installs chairman in ailing developer to guide its way out of debt
Embattled builder China Vanke, once the second-largest Chinese developer by sales, reshuffled its management while forecasting a record US$6.2 billion net loss for 2024 as it struggles to get out from under US$4.9 billion in debt maturing this year. The company named a chairman with a state-linked background, sending positive signals about its ability to pay its debts after a bond sell-off triggered ratings downgrades from Fitch Ratings and S&P Global a week ago. The news boosted prices of Vanke's bonds. Yu Liang resigned as chairman due to "work adjustment reasons", but would remain with the company as a director, Vanke said in a filing with the Hong Kong stock exchange on Monday. The new chairman Xin Jie is also chairman of state-owned Shenzhen Metro Group, the developer's largest shareholder. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. With assets of more than 5 trillion yuan (US$689 billion), the Shenzhen State-owned Assets Supervision and Administration Commission (SSASAC) has "the ability, strength and enough 'bullets' to support Shenzhen Metro Group to promote a stable development of Vanke through all possible means", an SSASAC representative said on Monday, according to state-owned newspaper Nanfang Daily. The asking price of Vanke's bond maturing in 2025 advanced 11 per cent, while the asking price of its bond maturing in 2029 rose 9 per cent, according to Dealing Matrix, a bond information provider. Vanke said in a separate filing that it expects a net loss of 45 billion yuan for 2024, down from a 12 billion yuan net profit in 2023, citing falling sales and profit margins, provisions for credit and inventory impairments, and losses in bulk asset and equity transactions. Earlier, the company reported that total sales plunged 34.6 per cent year on year in 2024 to 246 billion yuan. Despite the state-backed expression of confidence in Vanke's fate, some analysts raised concerns. "Vanke's issue stems from the imbalance between supply and demand in China's housing market," said Shen Meng, director at Beijing-based investment firm Chanson & Co. "With demand waning, no matter how many homes are built, they struggle to sell, preventing the formation of a closed cash-flow loop. While state-owned enterprises can offer financial support, they can't solve the problem of selling the properties." Xin has served as a Vanke director since July 2020 and was vice-chairman of the company's board from October 2023 to this month. Yu Liang, then chairman of China Vanke, speaks at a press briefing in March 2018 in Hong Kong. Photo: Edward Wong alt=Yu Liang, then chairman of China Vanke, speaks at a press briefing in March 2018 in Hong Kong. Photo: Edward Wong> CEO Zhu Jiusheng also resigned from his role, due to health issues, and would hold no position in the company, Vanke's filing said. The management reshuffle followed a report that Zhu was detained by public security authorities, which state media outlet The Economic Observer reported on January 16 but later deleted. On January 20, Fitch downgraded Vanke's long-term foreign and local-currency issuer default ratings (IDRs) to B- from B+. It also lowered the long-term IDR of Vanke Real Estate (Hong Kong), a wholly owned subsidiary, to CCC+ from B, among other adjustments. Fitch has now cut the firm's creditworthiness five times since July 2023. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved. Sign in to access your portfolio
