China Vanke - Beijing Zhongsheng Xingjian agreed to pledge accounts receivable totalling RMB1,140 mln

China Vanke Co., Ltd. (HK:2202) has entered into a connected transaction with its major shareholder, Shenzhen Metro Group, to secure a RMB1.14 billion loan facility. The financing, which carries a term of up to three years and a floating interest rate of one-year LPR minus 71 basis points, is intended to support the company’s operational funding requirements within a defined drawdown period. To collateralize the loan, Vanke will pledge accounts receivable of RMB1.14 billion from a specific project, resulting in a loan-to-value ratio of 100% and aligning project cash flows with the repayment obligation.

As a connected transaction, the arrangement is subject to Hong Kong’s reporting requirements but does not necessitate independent shareholder approval or financial advisory input, facilitating a streamlined access to liquidity backed by its substantial shareholder. Shenzhen Metro Group, a state-owned urban rail and infrastructure operator, holds 27.18% of Vanke’s share capital.

The recent move underscores Vanke’s strategy to leverage shareholder support amid ongoing market challenges in China’s real estate sector. Analysts have issued a "Sell" rating for the stock, with a price target of HK$2.70.