China Vanke Co., Ltd. informed bondholders on December 10 that if they do not vote in favor of extending its RMB 2 billion (approximately $282.9 million) 3% onshore bond due December 15, the company will utilize a 5-day grace period mentioned in the bond prospectus. Prior to the meeting, Vanke had told some investors it hoped to extend the grace period to 30 days and might pay "partial interest" during the extension.
Vanke is reportedly seeking to extend the maturity of its RMB 2 billion (approximately $282.9 million) 3% onshore bond by one year. A formal bondholder meeting was held today, with voting closing on December 12. Results will be announced on December 15.
Investors noted that Vanke’s Executive President and CFO Han Huihua, along with Chief Financial Officer Bu Lingqiu (appointed by state-owned shareholder Shenzhen Metro Group), attended the meeting.
Before the meeting, Vanke had proposed extending the grace period from 5 to 30 days and hinted at "partial interest" payments during the extension, though neither proposal was mentioned during discussions.
Vanke stated that if investors reject the bond extension proposal, it will use the grace period to continue negotiations. The company acknowledged its "escalating liquidity pressure," citing a 78% decline in property sales from 2021 levels.
Investors revealed that Vanke emphasized its major shareholder Shenzhen Metro—holding a 27.8% stake—has provided RMB 30.8 billion ($4.36 billion) in financial support, exceeding typical non-controlling shareholder expectations. "Without such support, risks might have emerged earlier," the company said.
When asked whether the extension proposal was rushed, Vanke responded that it was "carefully considered." Regarding reports about offshore holders forming an ad-hoc group, the company said it had no further information and didn’t know the source of such market rumors.
One attendee suggested Vanke could consider a discounted placement in Hong Kong to raise RMB 20-30 billion ($2.8-4.2 billion) to address short-term debts, noting its Hong Kong-listed entity still has a market cap of about RMB 60 billion ($8.5 billion). Management responded that offshore equity or debt issuance constitutes a major capital decision requiring "careful study."
It was reported that Vanke, Shenzhen government officials, and the People’s Bank of China privately met bondholders on December 7 without reaching an agreement. Some non-bank investors are mobilizing opposition to the extension.
Vanke has two outstanding USD-denominated offshore bonds: a $1 billion 3.95% note due November 2027 and a $300 million 3.5% note due November 2029. Data shows the 2027 bond was quoted at 21.46 today.
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