By Clare Jim
HONG KONG (Reuters) -State-backed property developer China Vanke said it is facing short-term liquidity pressure and operational difficulties, but added that it has prepared “a basket of plans” to stabilise its business and cut debt.
Vanke has the support of Shenzhen’s state asset regulator as well as its largest shareholder, state-owned Shenzhen Metro, after reporting its situation to them, it also said in a filing that summarised comments made by the company in a meeting with analysts on Sunday.
Investors have been selling off Vanke’s shares and bonds in the past few weeks on liquidity concerns, triggering a rare central government directive to help the Shenzhen-based company.
Adding to its woes, S&P last week became the last of the major credit rating firms to strip its investment grade status, and the developer confirmed Chinese media reports that an executive based in the northeastern city of Jinan had been taken away by police for an unspecified investigation.
In the Sunday meeting hosted by company Chairman Yu Liang and CEO Zhu Jiusheng, the developer said the Jinan city commission for political and legal affairs had told it the investigation of the executive was over a personal matter and was unrelated to Vanke.
Vanke also said it had filed a lawsuit for defamation against a business partner who accused management of financial misconduct, including making personal gains from the business.
Shares of Vanke in Hong Kong edged up 1% on Monday morning, while its shares in Shenzhen rose more than 2%.
The firm promised in the Sunday meeting to complete projects and deliver apartments on time.
Vanke said last month it aimed to boost its cashflow by slashing debt by 100 billion yuan ($13.82 billion) over the next two years, and the Shenzhen state asset regulator was coordinating with several state-owned companies to help its cashflow.
($1 = 7.2382 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Edwina Gibbs and Jamie Freed)
