Vanke looks to offload stake in GLP
China Vanke is seeking to sell its entire stake in logistics firm GLP, according to people familiar with the matter, as the state-backed developer seeks to amass cash to stave off a debt crisis.
Vanke had held discussions with parties including stateowned investment company Guangdong Holdings and a Tianjin-based state-owned firm to exit its investment, said the people, who asked not to be identified because the matter is private.
No agreement had been reached, the people added.
Vanke bought a 21.4 per cent stake in GLP for about S$3.4 billion (HK$19.5 billion) in 2018.
Vanke did not immediately offer a comment yesterday, while GLP declined to comment. Calls to Guangdong Holdings’ headquarters went unanswered.
Shenzhen-based Vanke has become the latest flashpoint in the nation’s property downturn, and is seeking to ease concerns about its ability to avoid default. Last weekend, executives including chairman Yu Liang told brokerages it was making plans to resolve liquidity pressure and short-term operational difficulties.
The firm bought the GLP stake six years ago when the warehouse manager was taken over by a Chinese consortium in a S$15.9 billion buyout and delisted from the Singapore stock exchange. The move came as part of a push to build its logistics business as high-end storage became a thriving corner of China’s commercial property market.
Vanke said at an investor event on Sunday it was willing to sell or pledge any non-core assets for funds as long as terms were appropriate, people familiar said earlier this week, citing management. Some of its regional units are setting up teams for potential asset sales.
It is not clear how attractive the stake in GLP might be. The company, a former investor darling that has most of its logistics assets on the mainland, has faced concerns about its liquidity because of the nation’s property crisis and economic slowdown. It was stripped of its last investmentgrade rating by S&P Global Ratings in November.
Still, GLP redeemed two dollar bonds worth more than US$600 million in recent months, illustrating its financial resilience, according to a Bloomberg Intelligence analysis. The price of its 3.875 per cent dollar notes due in June 2025 has recovered from a record low of 56 US cents to trade at 87 US cents on the dollar yesterday.
Meanwhile, Vanke was also preparing an asset package totalling about 130 billion yuan (HK$140.5 billion) to use as collateral as it sought new bank loans, Bloomberg reported this week.
Last month, Bloomberg also reported Vanke had been in talks with banks over a plan to swap bond holdings worth tens of billions of yuan in principal into secured debt. The swap would help the company avoid a public default while giving banks collateral to protect against any potential losses.
Credit rating firms including S&P have downgraded Vanke to junk in recent weeks as plunging home sales worsen its cash woes. The firm’s longer-term financial position might deteriorate if it was unable to carry out planned asset sales, S&P said last week.
Vanke faces a maturity wall next year when 36.2 billion yuan of onshore and offshore bonds come due, according to S&P.
As of the end of last year, the company had estimated accessible cash of 36.3 billion yuan, the rating firm said.