China Vanke gets $383 mln loan from state shareholder

Onewo

11/02/2025 04:19

* 
      Shenzhen Metro provides loan at 70% LTV, LPR-0.76% 
    

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      Vanke pledges 18.3% shares in Onewo as collateral
    

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      State support is positive, but more help is needed,
analysts say
    

  
       HONG KONG, Feb 11 (Reuters) - Cash-strapped China Vanke
 000002.SZ  said its major shareholder, state-owned Shenzhen
Metro, is giving it a 2.8 billion yuan ($383.12 million) loan,
in a sign the government is stepping up efforts to stabilise the
property developer.
    Vanke, in return, will pledge 211.5 million shares, or
18.3%, of its listed property services unit, Onewo Inc
 2602.HK , as collateral, the company said in a filing late on
Monday. 
    The loan is the first liquidity support from Shenzhen Metro
after a senior management reshuffle in Vanke last month that
increased state oversight and intervention to contain any
non-repayment risks. 
    Vanke's bonds jumped on Tuesday after the loan announcement,
with the offshore bond due May 2025 bid at 97.111 cents on the
dollar in morning trade, up from 94.8 cents a day ago, while its
yuan bond due March 2027 rallied 13.5%.
    In a separate filing on Monday, Vanke published a repayment
announcement for its 3 billion yuan notes maturing on February
16, signalling that it will make the repayment on time. 
    Analysts said the Shenzhen Metro loan shows the authorities'
efforts to avoid a bond default by Vanke. They added that it is
a good deal for Vanke because of the higher-than-market loan to
value ratio at 70% and a favourable interest rate of 2.34% as of
Monday's calculation based on the loan prime rate (LPR).
    They, however, said the amount is small compared to the more
than 30 billion yuan of Vanke public bonds maturing in the
remainder of 2025.
    JPMorgan said in a research note that given Shenzhen Metro
only had 30 billion yuan of cash, the authorities will need to
either inject more capital into the railway company owned by the
Shenzhen government, or ask other state-owned companies to
acquire assets from Vanke. 
    The brokerage said Vanke's liquidity will also hinge on its
home sales.
    "If Vanke’s sales become worse than expected, such that the
funding required for not just bond repayment but also for home
delivery has become larger than expected, the point might come
where Shenzhen Metro may consider if bond
restructuring/extension might be a more pragmatic approach," it
wrote. 
    Vanke currently holds a 57% stake in Onewo. It said in the
filing it will use the proceeds from the shareholder loan to
repay debt in the open market.
    Shares of Vanke in Hong Kong  2202.HK  edged up 0.9% by noon
on Tuesday, while its shares in Shenzhen slid 1.5%. Shares of
Onewo were down 1.1%.   
($1 = 7.3085 Chinese yuan renminbi)

 (Reporting by Clare Jim; Editing by Muralikumar Anantharaman)
 ((clare.jim@thomsonreuters.com;))