By Xie Yu
HONG KONG (Reuters) – Cash-strapped China Vanke has sold a parcel of land in Shenzhen at auction for 2.24 billion yuan ($309.18 million), a filing showed on Monday, down more than 27% than the price it paid for the same 19,000 square meter block almost seven years ago.
Vanke is working to raise funds after saying last month it is facing short-term liquidity pressures, one of several companies caught up in a broad cash crunch in China’s crisis-hit real estate sector.
Its largest shareholder, state-owned Shenzhen Metro, and Shenzhen-based company Baishuoyinghai jointly bought the plot at the reserve price from Vanke, according to an online filing uploaded to a trading center in Shenzhen on Monday.
Theirs was the only bid for the property, the same filing showed, filed after the mainland stock market closed.
Vanke bought the land for 3.1 billion yuan at the end of 2017, previous documents show.
In a statement to Reuters, Vanke said the deal reflects its largest shareholder “supporting the company with market-based, legitimate measures and real money.” According to the company, the deal will help the company free up capital from non-core assets.
Vanke has said it wants to boost cash flow this year with bank financing and more asset sales worth more than 30 billion yuan.
Last week, Vanke said it had received a 20 billion yuan syndicated loan from a group of banks led by state-owned Industrial and Commercial Bank of China and would promote other financing to boost liquidity.
Fitch Ratings on Friday downgraded foreign and local currency issuer default ratings to ‘BB-‘ from ‘BB+’ and set the outlook to negative, citing mainly weaker-than-expected year-to-date sales performance.
($1 = 7.2449 Chinese Yuan Renminbi)
(Reporting by Xie Yu; Editing by Jan Harvey)
