Vanke has announced the full repayment of its dollar bonds due this year, following a substantial syndicate loan of 20 billion yuan.
On June 5, Vanke A disclosed that it will fully repay the principal and interest of a medium-term note due on June 7, amounting to $612.6 million. The funds have already been transferred to Vanke Real Estate (Hong Kong) Co., Ltd.'s overseas bank account and will be deposited into the designated bank account of the agent bank on June 6.
According to WIND data, this $612.6 million bond is Vanke's largest dollar bond maturing this year. With this repayment, Vanke has no more dollar bonds maturing in 2023, effectively crossing a significant debt milestone for the year.
Vanke's President, Zhu Jusheng, had previously stated at an earnings conference that, excluding pre-sale regulatory funds, the company would manage to navigate through its debt repayment pressures in 2024. This repayment underscores his confidence.
Vanke is not only aiming for short-term financial stability but also pursuing long-term sustainable development. The company has laid out a plan to reduce interest-bearing debt by more than 100 billion yuan over the next two years and halve the total scale of interest-bearing debt in the next five years.
To achieve this, Vanke has introduced a comprehensive "slimming down and strengthening" plan, which includes adjusting financing models, with financial institutions providing a transition period of one to three years. The company also plans to dispose of 20 billion yuan worth of large assets annually and focus on its core businesses.
Since securing the 20 billion yuan syndicate loan, Vanke's financing situation has continued to improve. Between May 31 and now, the company secured an additional 1.7 billion yuan in bank loans through two new loans. In the past month alone, Vanke has obtained over 30 billion yuan in financing, including bank loans and CMBS. Additionally, the company is addressing cash flow concerns through asset disposals and issuing REITs. Recently, Vanke transferred the Shenzhen Bay Super Headquarters plot to its major shareholder, Shenzhen Metro Group, recovering 2.235 billion yuan.
Vanke stated that this transaction is part of its decisive implementation of the "slimming down and strengthening" plan. The deal helps reduce the occupation of funds by non-core assets, allowing the company to concentrate resources on strengthening its three main businesses. Shenzhen Metro Group's participation in acquiring the land use rights demonstrates the major shareholder's support for Vanke in a market-oriented and legal manner.
Vanke's swift asset transaction following the announcement of its streamlining plan reflects its commitment to reducing its size. The sale of non-core assets and quick fund recovery are seen as prudent choices to help the company navigate market changes and strategic adjustments.
On the sales front, Vanke has shown signs of recovery. In May, the company achieved full-caliber sales of 23.33 billion yuan, a 12% month-on-month increase. For the first five months of the year, Vanke's full-caliber sales reached 101.37 billion yuan, ranking third in the industry, only behind Poly Developments and China Overseas Land & Investment.
According to Founder Securities, Vanke's receipt of the 20 billion yuan syndicate loan reflects the market's confidence in the company and accelerates the repair of its credit profile. With strong sales performance and active asset liquidation, Vanke's liquidity is expected to continue improving.
With significant progress on the financing front and the introduction of new real estate policies, Vanke seems poised for a brighter future. The company now awaits continued improvement in sales to enhance its cash flow capabilities, setting the stage for a new chapter of growth and development in the latter half of the year.
