Vanke's debt rollover has been fermenting for nearly a week, and so far it has not stopped, and related rumors are still flying.
A few days ago, it was reported that Vanke's senior management went to Beijing to discuss with the insurance company the extension of the upcoming non-standard debt. Although Xinhua Asset Management has quickly responded to the untrue rumors, the market's confidence has been broken, and the scene of double killing of stocks and bonds has been staged again: on March 4, a number of Vanke's domestic bonds** fell sharply, of which "22 Vanke 06" fell by nearly 36%, once triggering a temporary suspension, and on the same day, Vanke A's stock price fell nearly 5% intraday.
Finally, the ** work report on March 5 made the developer breathe a sigh of relief, and the market seemed to stop falling and stabilized, with the above-mentioned "22 Vanke 06" **2%. The sentiment of Vanke's stock price has also been repaired, after falling by more than 2 percentage points in early trading, and then *** finally by a small ***
Looking back, the last time Vanke suffered a double kill of stocks and bonds was in November 2023, and the cause was also debt problems. At that time, the platform support of Shenzhen State-owned Assets finally brought the turmoil to an end.
Now that the turmoil has reappeared, it can be seen that the underlying problems have not been solved, even with the help of Shenzhen State-owned assets, Vanke's turmoil has not ended.
Vanke has always wanted to respond to all the gossip through practical actions.
At present, Vanke is facing multiple debt payments. According to Vanke's previous announcement, the interest on the two bonds of 22 Vanke and Vanke 02 for the period from March 4, 2023 to March 3, 2024 must be paid on March 4, 2024. In addition, on the upcoming March 11, Vanke will also face the US dollar bond VNKRLE 535 03 11 24 (xs1917548247), the size of the bond is 6$300 million, coupon 535%。。
Vanke responded on the 5th that the relevant debt repayment funds have been put in place, and the debt repayment work is being arranged in an orderly manner.
According to public information, in 2024, Vanke's domestic bonds due will total RMB 9.3 billion, of which RMB 5 billion will mature in the first half of the year; Overseas, about RMB10.5 billion of public bonds will mature during the year. Vanke has said that the company will guarantee debt repayment in many aspects, including foreign currency funds overseas, dividends or equity buybacks to overseas companies to achieve fund raising, and syndicated loans or debt swaps. In addition, Shenzhen State-owned Assets has made it clear that Vanke has "no financial risk".
In the face of Vanke's positive response, the market is still worried about its liquidity. According to the analysis, the market is worried that the overall sales of the property market will continue to be sluggish, and Vanke's hematopoietic capacity has not recovered, which has forced it to sell high-quality assets to cope with the peak of debt repayment, which will affect the company's long-term development. Third-party data shows that in the first two months of this year, the total sales of TOP100 real estate companies were 4,762400 million yuan, down 51 percent year-on-year6%。Among them, Vanke achieved sales of 334500 million yuan, a year-on-year decrease of 417%；Equity sales were 217400 million yuan, down 52 percent year-on-year6%。
Vanke has recently made frequent moves in terms of assets, including Banyan Tree, Qibao Commercial Plaza, and Shenzhen High-tech Investment 616% equity, etc., there are rumors that Vanke plans to ** part of the equity of Boyu, but the news has been denied by Vanke. It is reported that Vanke has also recently approached its shareholder Shenzhen Metro Group to discuss the urban renewal project of Samsung Industrial Zone, Futian District, Shenzhen, but the transaction will not be implemented in the short term.
Compared with asset disposal, the market expects Vanke to successfully obtain debt extension or restructuring. In the latest news, Vanke is seeking an offshore unsecured club loan, and Bank of China (Hong Kong), as the lead bank of the loan, has been approved for a HK$1.5 billion quota. However, whether the relevant fund raising can be implemented still depends on whether Vanke has sufficient ability to pay on time.
According to related sources, banks that may participate in the loan are closely watching Vanke's private debt buyback negotiations with some insurance companies. Vanke has received verbal consent from a number of insurers, including New China Insurance and Taiping Insurance, to postpone the exercise of its "insurance debt plans" that will be exercised in the coming months, on the condition that Vanke guarantees that the private debt will be paid on time. This is also the focus of the market in the near future.
Among them, the scale of the insurance debt plan related to Xinhua is 3 billion yuan, which originally expired on December 11, 2023, and the underlying assets are a number of commercial real estate projects of Vanke; Taiping's real estate debt investment plan is about 2 billion yuan, which expires in January 2024. Both schemes have agreed to extend the exercise period by three months.
Clearly, creditor confidence remains rooted in the company's ability to operate. Although the recent good news about the property market is frequent, it still takes time for the real recovery to take place. The long recovery period of market confidence this time also surprised many real estate companies, including Vanke.
The third quarter report of 2023 shows that Vanke has 1036 cash on its books8 billion yuan, if the pre-received regulatory funds are excluded, there are still 60 billion yuan of funds in hand, which can still cope with short-term debts.
However, cash flow cannot be a "reassuring pill", and Country Garden also has hundreds of billions of funds on its account, which is prioritized for "guaranteed delivery of buildings", the extension of domestic debts, and the restructuring of overseas debts. It can be seen that Vanke, which holds 60 billion in cash, is not easy.
At Country Garden's monthly group management meeting held on March 4, Yang Huiyan pointed out that the company's current priority is to ensure cash flow.
According to the information revealed at the meeting, Country Garden is actively taking measures to increase revenue and reduce expenditure, strive to reduce cash flow expenditure by reducing non-operating expenses, and actively increase cash inflow through sales to ensure that there is sufficient funds to support delivery and daily operations.
Yang Huiyan also said that the current resources of Country Garden itself can guarantee the delivery of houses this year. At the same time, she pointed out that while resources are sufficient, the problem lies in the mismatch of time and space. Therefore, we should cherish the use of resources and wait for the opportunity for the market to recover.
As Yang Huiyan said, balance sheet repair is a common problem faced by the industry. Everyone is waiting for the market to recover, but the key is when.
Now, the highest level of policy has also begun to exert force. "Optimize real estate policies, treat both the symptoms and the root causes, and resolve real estate risks. It has become an important direction of real estate work in 2024.
On March 5, the second session of the 14th National People's Congress opened in the Great Hall of the People, and Premier Li Qiang made a work report to the General Assembly on behalf of the General Assembly. In this ** work report, there is a lot of ink on real estate-related work.
Li Qiang said that in the past year, due to the city's policies to optimize real estate regulation, promote the reduction of housing loan costs, actively promote the delivery of buildings, formulate and implement a package of local debt resolution plans, classify and dispose of financial risks, and maintain the bottom line of no systemic risks.
For 2024, Li Qiang emphasized that it is necessary to better coordinate development and security, and effectively prevent and resolve risks in key areas. Adhere to high-quality development to promote high-level security, ensure high-quality development with high-level security, treat both the symptoms and the root causes, resolve risks such as real estate, local debt, and small and medium-sized financial institutions, and maintain overall economic and financial stability.
Optimize real estate policies, and provide equal support to the reasonable financing needs of real estate enterprises under different ownership systems, so as to promote the steady and healthy development of the real estate market. It was mentioned again in the work report.
For the policy force, Vanke and other real estate companies are looking forward to it. However, the property market has not recovered, and the mantra above the head is still difficult to solve.