China Vanke secures US$194 million loan from Industrial Bank in brief respite for troubled property developer
- The purpose of the loan is to meet ‘operational needs’ as well as to repay Vanke’s loans and bonds, according to the filing
- Earlier this month, Chinese regulators asked large banks to step up support for Vanke and asked insurers to defer its maturities, according to media reports
The Shenzhen-based developer said in a statement filed with the Hong Kong exchange late on Tuesday that it had obtained a 1.4 billion yuan (US$194 million) loan from Industrial Bank for 14 years, based on a 35 billion yuan guarantee authorised during a shareholders meeting held in June.
The loans were secured and guaranteed by units Shanghai Central District Real Estate and Shanghai Vanke Enterprise. Shanghai Central District is fully owned by Shanghai Vanke.
“The risks of this guarantee are controllable and there will be no harm to the interests of the company and shareholders,” state-backed developer Vanke said while adding the purpose of the loan was to meet “operational needs” as well as to repay the developer’s loans and bonds.
These developments have somewhat calmed a market that has been rocked by defaults and following the liquidation order for China Evergrande, the world’s most indebted developer.
