China Vanke Co will raise US$499mil (RM2.23bil) in a Hong Kong share placement, its first in the Asian financial hub since 2020. — Bloomberg
BEIJING: Two of China’s biggest real estate developers confirmed plans to raise cash by selling shares, the latest sign that financing conditions for the embattled industry are improving.
China Vanke Co will raise US$499mil (RM2.23bil) in a Hong Kong share placement, its first in the Asian financial hub since 2020. State-run Poly Developments & Holdings Group Co said the Shanghai stock exchange is reviewing its plans announced in December for an onshore private share sale of as much as 12.5 billion yuan (RM8bil).
The moves reflect a thawing of fund-raising conditions for Chinese developers as the government eases a clampdown on excessive leverage to stem an unprecedented housing slump.
China’s property market is showing early signs of picking up, with new-home prices halting declines in January and sales rising for the first time in 20 months in February.
As part of a sweeping sector rescue late last year, China ended a ban on onshore equity fundraising for property developers and widened a programme to facilitate local bond sales with government guarantees.
Still, access to financing is largely limited to the stronger players, with defaulted firms including China Evergrande Group still shut out of capital markets.
Vanke, China’s second-largest developer by sales last year, agreed to issue 300 million new H shares at HK$13.05 (RM7.40) a piece, according to a statement to the Hong Kong stock exchange.
That’s a discount to Wednesday’s closing price of HK$13.90 (RM7.90).
The company aims to use the proceeds to repay debt and replenish working capital.
In February, it amassed the equivalent of US$2.2bil (RM9.8bil) through a placement on the mainland, the largest onshore additional share sale by a Chinese developer since authorities reopened the equity market for the sector last year.
Poly Developments is seeking to sell no more than 819.1 million A-shares to as many as 35 investors, a statement to the Shanghai exchange showed.
The proceeds will help it reduce its asset-liability ratio and cut interest expenditure. — Bloomberg
