Vanke readies US$18 billion of assets as collateral for new loans

China Vanke, the Chinese state-backed developer that’s become the latest flashpoint in the nation’s property crisis, is preparing an asset package totalling about US$18 billion to use as collateral as it seeks new bank loans, people familiar with the matter said.

A company executive told analysts about the plan at an investor event on Sunday (Apr 14), the people said, asking not to be identified as the matter is private. Separately, some of Vanke’s regional units are setting up teams for potential asset sales, one person familiar with the matter said.

The company mentioned the investor event in an exchange filing, but didn’t disclose details of the asset package or any potential sales. Vanke didn’t immediately reply to requests for comment.

Vanke is seeking to assuage concern about its ability to stave off default after a market selloff last week. It said in its filing on Sunday that chairman Yu Liang and president Zhu Jiusheng told the meeting with brokerages including Citigroup, UBS Group, Morgan Stanley and China International Capital that it’s making plans to resolve liquidity pressure and short-term operational difficulties. 

Its shares climbed as much as 2.8% in Shenzhen on Monday, while its dollar notes due in June gain 0.5 US cent to 91.9 US cents even as others due in 2027 hovered around 38.6 US cents, near record lows. 

In March, Bloomberg reported that Vanke has been in talks with banks over a plan to swap bond holdings worth tens of billions of yuan in principal into secured debt. The swap would help Vanke avoid a public default while giving banks collateral to protect against any potential losses.

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In Sunday’s meeting, Vanke executives denied speculation that the government banned managers above the group vice-president level from travelling overseas after a chief partner in Central China went Awol, according to the filing.

They said this partner went to stay in the US for family reasons after he resigned in 2023. Overseas business trips by group managers remain normal, they added, noting Zhu had just returned from Hong Kong and co-president Zhu Baoquan was headed to Japan. BLOOMBERG