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China Vanke has proposed an improved plan to pay overdue interest on a 2 billion yuan (USD 284 million) bond and extend its repayment grace period, in a bid to avoid default. The developer intends to pay 60 million yuan in interest by December 22 and increase the grace period from five to 30 trading days. After bondholders previously rejected its extension request, Vanke is holding a second meeting with creditors to vote on the proposals. The company is also seeking to extend repayment for a 3.7 billion yuan (USD 525 million) note due later this month.
China Vanke has presented a revised plan to pay overdue interest on a 2 billion yuan (USD 284 million) bond, aiming to gain creditor approval for a delayed principal repayment and prevent default. The developer intends to settle the 60 million yuan interest by December 22. Along with this, it is requesting an extension of the current five-business-day grace period to 30 trading days. Advertisement
This move comes as China's property sector faces slowing demand, with previous developer defaults affecting homebuyer confidence and broader economic growth. Vanke's initial attempt to extend repayment was rejected by bondholders, prompting a second meeting that will start on Thursday and conclude with voting on December 22 at 0200 GMT.
Previously, interest-payment discussions were suggested by investors rather than the company. The latest plan, led by Vanke, is seen as a sweetened proposal, placing stronger obligations on the developer than earlier bondholder-led terms. Alongside the extension request, the company seeks a waiver of procedural time limits to allow the meeting to occur before the current grace period ends, as failure to obtain approval could trigger default. Each proposal requires at least 90% approval from creditors.
Vanke also plans to meet with insurance firms and commercial banks in Shenzhen, though details of the discussion were not immediately disclosed. The developer had earlier surprised markets by requesting a public bond extension, following billions in loan support from its state shareholder, Shenzhen Metro. Additionally, Vanke is proposing a one-year extension for its 3.7 billion yuan (USD 525 million) bond maturing later this month.
The company's Shenzhen-listed shares fell slightly by 0.2%, while its Hong Kong-traded stock inched up 0.8%. Onshore bonds were largely stable, reflecting cautious investor sentiment amid uncertainty over repayment outcomes.
Source Reuters
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