By Jiahui Huang
China Vanke has secured a fresh loan that takes its total borrowings this month to more than US$1 billion, part of the state-backed developer's ongoing efforts to temper liquidity pressures as it seeks to finish housing projects.
Vanke, one of China's few major developers yet to default in the country's ongoing property crisis, said in a stock-exchange filing Monday that it had obtained a loan for 1.2 billion yuan ($165.9 million) from Bank of China to use for development projects in Changzhou, a city in Jiangsu province.
That loan, which takes the total borrowings of Vanke and its units this month to the equivalent of more than US$1 billion, according to public filings, comes after the company last month told investors it was facing short-term liquidity pressures that it was confident it could resolve.
Analysts said the loans could give the Shenzhen-based company, once one of China's largest property developers, a short-term lift until consumers return en masse to the country's housing market.
"It will help ease the market's concern on Vanke's cash flow, though more meaningful improvement in liquidity will be from turnaround in its housing sales," Morningstar analyst Jeff Zhang said.
Vanke, in which a state-owned subway operators holds about a one-third stake, is a top property pick among many analysts amid growing signs that Beijing is moving to help rescue an ailing sector, including by recently encouraging local governments to buy up excess apartments and turn them into public housing.
Vanke's Hong Kong-listed shares have rallied 46% this month, helping trim year-to-date losses to 6.2%.
Vanke has said it intends to reduce interest-bearing debt by around US$14 billion--from a total of around US$44 billion--by the end of 2025.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
May 21, 2024 03:55 ET (07:55 GMT)
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