China Vanke pledges to repay offshore debts due soon as it seeks calm amid liquidity crisis rumours

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The company says it has prepared all the funds needed for the repayment of a US$630 million bond due next Monday, and described the process as ‘orderly’

It comes amid market rumours that Vanke faces a liquidity crisis and is negotiating with state insurers to extend the maturities of some private borrowings

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Shares of Vanke fell in Hong Kong on Tuesday, while the bid price for a bond maturing in June fell 0.60 cents to US$88.82. Photo: Bloomberg

Yulu Ao

Published: 5:30pm, 5 Mar 2024Updated: 5:35pm, 5 Mar 2024

China Vanke, the country’s second-largest property developer, has pledged to repay its outstanding offshore debts that are coming due soon, as its shares and bonds tumbled amid rumours about liquidity distress.

The company has prepared all the funds needed for the repayment of a US$630 million bond due next Monday, and is pushing forward with the process of repaying its debts in an “orderly” fashion, it said in a statement to the Post on Tuesday.

The statement came amid market rumours that Vanke is facing a liquidity crisis and has started a new round of negotiations with state insurers to extend the maturities of some private funds it borrowed.

Shares of Vanke fell 2.5 per cent to HK$5.46 at the Tuesday close in Hong Kong, having plunged as much as 4.1 per cent in the morning trading session. The bid price for a bond maturing in June fell 0.60 cents to US$88.82, according to data compiled by Bondsupermarket.

The promise to fulfil its obligations came as New China Asset Management said in a statement at the weekend that it has maintained normal business ties with the developer, in response to unspecified recent reports about the two companies.

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A month ago the indebted developer reached an agreement with Link Reit, a property investment trust, to sell its remaining 50 per cent stake in Qibao Vanke Plaza in Shanghai for 2.38 billion yuan (US$330 million). The shopping mall had been one of the company’s most profitable projects.