Cash-strapped China Vanke (000002.SZ), opens new tab has sold a Shenzhen land plot via auction for 2.24 billion yuan ($309.18 million), a filing on Monday showed, more than 27% below the price it paid for the same 19,000 square-metre block nearly seven years ago.
Vanke is working to raise funds after saying last month it is facing short-term liquidity pressure, one of many companies to have been caught up in a broad-based cash crunch in China’s crisis-hit real estate sector.
Its largest shareholder, state-owned Shenzhen Metro, and Shenzhen-based company Baishuoyinghai jointly bought the plot at Vanke’s reserve price, according to an online filing, opens new tab uploaded to a trading center in Shenzhen on Monday.
Theirs was the only bid for the asset, the same filing, made after mainland stock market was closed, showed.
Vanke bought the land in late 2017 for 3.1 billion yuan, according to previous documents.
In a statement to Reuters, Vanke said the deal reflects that its largest shareholder is “supporting the company with market-based, legitimate measures and real money”. It said the deal will help the firm free up capital from non-core business assets.
Vanke has said it aims to boost cashflow this year with bank financing and more asset disposals worth more than 30 billion yuan.
Last week Vanke said it had received a 20 billion yuan syndicated loan facility from a group of banks led by state-owned Industrial and Commercial Bank of China (601398.SS), opens new tab and would push forward other financing to boost its liquidity.
Fitch Ratings on Friday downgraded its long-term foreign- and local-currency issuer default ratings to ‘BB-‘ from ‘BB+’ and set the outlook as negative, citing a mainly weaker-than-expected sales performance in the year to date.
($1 = 7.2449 Chinese yuan renminbi)
