(Jan 6): Ripples from the crisis at Chinese developer China Vanke Co are reaching all the way to builders fully owned by the state.
One such firm, Overseas Chinese Town Enterprises Co, told some bondholders in meetings Monday (Jan 5) and Tuesday that Vanke’s crisis has already impacted the property market this year and that it wanted to address those concerns, according to people familiar with the matter.
Overseas Chinese Town Enterprises representatives told the investors that it had received clear guidance from its owner, the State-owned Assets Supervision and Administration Commission of the State Council, that it would offer all necessary support to ensure that bond repayments are made, the people said, asking not to be identified as the matter is private.
The mid-size developer, which focuses mainly on cultural and tourism-related projects, also said that the state asset supervisor has been exploring possible options, such as a cash injection or asset transfer, the people added.
The small-group meetings with investors come as Vanke struggles to gain creditor backing for bond extension proposals, after state-run Shenzhen Metro Group Co, its largest shareholder with a 27% stake, scaled back its support for the distressed builder. Chinese policymakers have long sought to ease concerns in the sector and recently pledged to intensify their efforts to stabilise the housing market.
Overseas Chinese Town and the state asset supervisor didn’t immediately respond to requests for comment.
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Overseas Chinese Town and the regulator are also in talks to bolster the builder’s refinancing abilities, the people said, citing the company. One possibility would be for the builder to issue longer-dated bonds in the first half of this year, the people added.
Overseas Chinese Town only issued yuan-denominated notes maturing in less than one year in 2025, according to Bloomberg-compiled data. The company’s yuan bond due November 2027 was trading at 97 yuan Tuesday afternoon.
Uploaded by Arion Yeow
