ββ#forexnews #ChinaVanke β
π Beijing rescues another loser
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Chinese banks are again trying to pull a major construction company out of the quagmire after Moody's downgraded its credit rating to "undesirable" status on Monday. But China Vanke has defaulted on its debt after all and is firmly on the path of Evergrande and Country Garden
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Beijing is struggling to restore confidence in the country's slumping real estate industry, but the touted stimulus measures have so far failed to revive the sector. China Vanke (2202 HK), the second-largest real estate developer with more than half of its shares owned by various state-owned entities, has faltered. Twelve major banks, including six big lenders, are negotiating a syndicated loan of up to 80 billion yuan ($11.2 billion) to enable the company to meet debt maturities.
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Until recently, Vanke was considered one of the most resilient real estate developers in China precisely because of the government's high shareholding. Now the Shenzhen government, one of Vanke's key shareholders, is overseeing the negotiations.
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In 2023, Vanke's sales fell 10%, and in January 2024, sales fell 32%. Its Hong Kong-listed shares have lost nearly 30% since November and are down another 9% this year.
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Last week, Nie Hong, China's housing minister, said the government would not help developers who are "seriously in trouble." They will simply be allowed to go bankrupt and restructure their debts with the rest of their capital, which is safer for the budget. And the fate of the ordinary shareholders of the bursting giant is a great plot for a financial thriller.
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What do you think?
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Profits to yβall!