China urges real estate project acquisitions to aid struggling developers -state media

Kaisa Prosperity Holdings

20/12/2021 03:15

SHANGHAI, Dec 20 (Reuters) - China is urging large private
and state-owned property companies to acquire real estate
projects from troubled developers to reduce risks that mounting
debt piles will destabilise the economy, the official China
Securities Journal said on Monday.
    The People's Bank of China (PBOC) and the China Banking and
Insurance Regulatory Commission (CBIRC) recently issued a notice
to financial institutions, urging them to strengthen financial
support for such acquisitions, the newspaper reported.
    Over the past months, Chinese regulators have marginally
eased funding curbs on the real estate sector, to prevent debt
risks spreading from struggling developers including China
Evergrande Group  3333.HK  and Kaisa Property Holdings
 2168.HK .
    Regulators are urging Chinese banks to actively provide
lending to fund acquisitions of projects owned by cash-strapped
developers, and avoid cutting, or withdrawing, loans to these
companies, China Securities Journal reported. 
    But only the acquisition of real estate projects, rather
than acquiring stakes in the struggling developers, would be
encouraged, the newspaper said, citing unidentified sources.
    Meanwhile, developers without financial problems are also
being encouraged to issue bonds to fund such acquisitions, and
PBOC is urging financial institutions to invest in such debt
instruments, according to the newspaper. 
    Developers including China Merchants Shekou Industrial Zone
Holdings Co (001979.SZ) plan to issue debt instruments via the
interbank market in the near term to fund mergers and
acquisitions, local media has reported. 

 (Reporting by Samuel Shen and Andrew Galbraith; Editing by
Kenneth Maxwell)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))