The Chinese property developer China Vanke has announced the resignation of its chairman and CEO, Yu Liang and Zhu Jiusheng respectively, amidst growing anxieties about the company's ability to meet its financial obligations. The move is seen as a signal of increased state intervention in the company's affairs, with Xin Jie, chairman of Shenzhen Metro, Vanke's major shareholder, taking over as chairman.
Property developer China Vanke announced on Monday (January 27th) that its chairman, Yu Liang, and CEO, Zhu Jiusheng, have resigned. This move comes amid growing concerns about the company's liquidity as it faces several debt maturity deadlines in the current year.
Xin Jie, the chairman of Shenzhen Metro, Vanke's major state-owned shareholder, will assume the role of Vanke's chairman, signifying increased state oversight and expectations that the government will intervene to manage potential non-repayment risks. Yu Liang will retain his position within the company as executive vice president, while three other individuals from Shenzhen state-owned firms will also be appointed to the same role. Earlier this month, a state media outlet reported that Vanke's CEO had been detained and that the company could be subject to a takeover or reorganization. This report was swiftly removed from circulation within hours of its publication.In a filing, Vanke stated that 'to effectively mitigate risks and earnestly safeguard the interests of house buyers, creditors, and investors, the Board has resolved to strengthen the Group’s management capabilities, leverage the resource advantages of Shenzhen Metro ... as the substantial shareholder and other parties.' Vanke acknowledged experiencing 'temporary liquidity difficulties' and pledged to focus on its core businesses, alongside other measures, to enhance its operations. In a separate filing, Vanke projected a net loss of 45 billion yuan for 2024, a stark contrast to the 12 billion yuan net profit achieved in 2023. This anticipated decline is attributed to a fall in sales and profit margins, additional provisions for credit and inventory impairments, as well as losses incurred in certain bulk asset and equity transactions. As one of China's most recognizable household names, with numerous projects spanning major cities, Vanke is currently around a third owned by Shenzhen Metro. Analysts have voiced concerns that Vanke's challenges could undermine the fragile recovery in homebuyer confidence observed in recent months. They also warn that banks may further restrict financing to the sector, potentially squeezing developers who have yet to default on their obligations
China Vanke Property Developer Resignations Liquidity Crisis Government Intervention Shenzhen Metro Debt Maturity
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