(Yicai) May 15 -- China Vanke said Shenzhen Metro will lend the property developer another CNY1.6 billion (USD221.8 million) for debt repayment, making this the fourth loan from its largest shareholder in just over three months.

The three-year loan carries a 2.34 percent interest rate, the Shenzhen-based company said in a statement yesterday. At 76 basis points below China's benchmark one-year loan prime rate, it is the same rate as for the previous three loans.

Shenzhen Metro extended two loans to Vanke in February, one for CNY2.8 billion and the other for CNY4.2 billion, and then a further CNY3.3 billion on April 30. To help repay its debts this year, Vanke has now borrowed CNY11.9 billion (USD1.6 billion) from the state-owned rapid transit operator.

The terms are as generous this time as they were for the credit provided last month. Vanke may prepay at any time, extend the repayment period with the lender’s consent, and pay the interest together with the principal at maturity. No collateral was needed for the last two loans. The first two required Vanke to pay interest quarterly and provide assets as surety.

Shenzhen Metro is helping Vanke financially because the developer needs to pay back substantial amounts of debt this year. It has about CNY32.6 billion (USD4.5 billion) of onshore debt falling due in 2025, according to data from Wind Information.

This month and next, Vanke has three onshore and two offshore bonds maturing, amounting to CNY6.6 billion. Repayment pressure will peak in July, with around CNY6 billion in Chinese yuan-denominated bonds coming due that month.

Vanke repaid a USD423 million note on May 12. The next, some CNY1.5 billion, is due on May 19.

The company also has a substantial guarantee exposure. As of April 30, its outstanding guarantees stood at CNY78.8 billion (USD10.9 billion), equal to 39 percent of the firm’s audited net assets at the end of last year.

Huge debt repayments and daily operating expenses have drained Vanke’s cash reserves. The company’s first-quarter earnings report showed that it spent CNY17.4 billion servicing its debt in the period, an increase of more than CNY1.7 billion from a year earlier.

As of March 31, Vanke had about CNY75.5 billion of cash, less than the CNY88.2 billion it had at the end of 2024.

A large part of the CNY75.5 billion has already been earmarked as building funds for pre-sold projects under construction, so the firm cannot divert that for other purposes, an industry insider told Yicai. Without further shareholder loans, Vanke’s freely available cash to service debt would be very limited, they added.

Editors: Tang Shihua, Futura Costaglione