China Vanke Uses Logistics Unit Shares as Collateral for $2.8 Billion Loan

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China Vanke has 14.8 billion-yuan worth of offshore bonds due in June.

Cash-strapped property developer China Vanke Co. Ltd. said Thursday it has received a 20 billion yuan ($2.78 billion) syndicated loan facility by pledging shares in its logistics service unit.

With more than 10 billion yuan ($1.39 billion) of offshore debt due in the next month and a bigger-than-expected drop in sales, the Shenzhen-based developer is facing increasing liquidity stress.

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China Vanke secured a 20 billion yuan ($2.78 billion) syndicated loan by pledging its 81.6% stake in its logistics unit, VX Logistics.
Vanke faces significant financial strain with over 10 billion yuan ($1.39 billion) in offshore debt due soon and declining sales.
The loan aims to address liquidity issues, extending existing debt and providing new financing, amidst broader challenges in China's property sector.

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Who’s Who

China Vanke Co. Ltd.: China Vanke Co. Ltd. is a property developer facing financial stress due to a significant drop in sales and over 10 billion yuan in offshore debt due soon. Despite avoiding default on publicly traded bonds, it has pledged shares in its logistics unit, VX Logistics, for a 20 billion yuan syndicated loan led by China Merchants Bank. Vanke continues to seek additional financing and has offloaded assets to meet debt obligations.

China Merchants Bank Co. Ltd.: China Merchants Bank Co. Ltd. led a 20 billion yuan ($2.78 billion) syndicated loan to China Vanke Co. Ltd., with Vanke pledging shares in its logistics unit, VX Logistics, as collateral. Half of the loan has already been received, serving as an extension of existing debt and providing new financing for Vanke's working capital.

Industrial Bank Co. Ltd.: Industrial Bank Co. Ltd. is one of the lenders in the 20 billion yuan syndicated loan facility provided to China Vanke Co. Ltd. This loan is partly used to manage Vanke's liquidity amid its financial challenges. The bank is also reported to be part of a potential 50 billion yuan syndicated loan for Vanke, led by the state-owned Industrial and Commercial Bank of China.

Country Garden Holdings Co. Ltd.: Country Garden Holdings Co. Ltd. is mentioned as part of a list of companies, including China Vanke Co. Ltd., that are facing severe challenges and fighting for survival amid China's property crisis.

Industrial and Commercial Bank of China: The Industrial and Commercial Bank of China (ICBC) is a state-owned lender and one of the biggest banks in China. It is leading a group of 12 lenders in talks with China Vanke Co. Ltd. to provide a 50 billion yuan syndicated loan. It remains unclear whether Vanke's recent 20 billion yuan loan is part of this larger financing.

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