Written by Xie Yu
HONG KONG (Reuters) – Cash-strapped China Vanke Group has sold a plot of land in Shenzhen at auction for 2.24 billion yuan ($309.18 million), more than 27 percent cheaper than the company paid for the same 19,000 square meter site about seven years ago, according to a filing on Monday.
Vanke said last month it was facing short-term liquidity pressures and was working to raise capital, one of many companies caught up in a broader financing crunch in China’s crisis-hit property sector.
The company’s largest shareholders, state-run Shenzhen Metro Co. and Shenzhen-based firm Baishuo Yinghai, jointly purchased the land at Vanke’s lowest bid, according to online documents uploaded to a Shenzhen trading centre on Monday.
They were the only bidders for the assets, according to the same filing, which was filed after mainland China’s stock markets closed.
Vanke bought the land in late 2017 for 3.1 billion yuan, according to previous documents.
Vanke said in a statement to Reuters that the deal reflects its largest shareholder “backing the company with market-based lawful means and real funds.” The company said the deal would allow it to free up capital from non-core business assets.
Vanke has said it aims to boost its cash flow this year through bank loans and asset sales worth more than 30 billion yuan.
Vanke said last week it had raised a 20 billion yuan syndicated loan facility from a group of banks led by state-owned Industrial and Commercial Bank of China and was pursuing other fundraising to boost liquidity.
Fitch Ratings on Friday downgraded the company’s long-term foreign and local currency issuer default ratings to ‘BB-‘ from ‘BB+’ with a negative outlook, citing weaker-than-expected revenue performance for the year to date.
(1 dollar = 7.2449 Chinese yuan)
(Reporting by Xie Yu; Editing by Jan Harvey)
