(Reuters) – Chinese officials are working to stabilize the operations of China Vanke after liquidity stress and uncertainty over its CEO’s whereabouts caused turmoil in the firm’s bonds and shares last week, Bloomberg News reported on Monday. The property developer’s chief executive Zhu Jiusheng had been temporarily detained, the Economic Observer reported last week, citing unnamed sources. The state-backed newspaper also indicated that Vanke could face a government takeover and reorganisation. Bloomberg’s report, which cited people familiar with the matter, said officials in Shenzhen convened a closed-door meeting last Friday to discuss the company’s future. New auditors and financial advisers are expected to be brought in to assess Vanke’s balance sheet and property projects in preparation for the next steps, according to the report.
The people familiar didn’t have additional information on Zhu’s latest status, the report said, adding that the discussions regarding the measures to stabilize Vanke’s operations are in the preliminary stage and could be subject to change. Vanke had previously been viewed as insulated from China’s broader property market turmoil due to its backing by major state-owned shareholder Shenzhen Metro, while most other crisis-hit developers are privately owned.
The firm’s interest-bearing debt totalled 331.3 billion yuan ($45.29 billion) at the end of June, with $3.4 billion in public bonds maturing this year.
($1 = 7.3148 Chinese yuan)
(Reporting by Adwitiya Srivastava in Bengaluru; Editing by Sherry Jacob-Phillips)
