China Vanke Co., Ltd. (stock code: 2202) has announced a continuing connected transaction through a Loan Framework Agreement with Shenzhen Metro Group, a substantial shareholder of the company holding approximately 27.18% of its total share capital.
Under the agreement, Shenzhen Metro Group will provide loans of up to RMB22 billion to China Vanke for a span of up to three years. This includes unsecured loans under previously signed agreements (the “Designated Agreements”) and additional secured loans to be agreed upon going forward. The proceeds from the loan will be used primarily to repay existing debts and related interest, subject to Shenzhen Metro Group’s written consent for any other usage.
Key elements of the agreement include: • Aggregate Principal Limit: The maximum principal available is RMB22 billion during the period from 2025 to the date of China Vanke’s 2025 annual general meeting, expected by 30 June 2026. • Interest Rate: The rate will be the higher of 2.34% or the one-year Loan Prime Rate (LPR) minus 66 basis points, with interest generally settled on a quarterly basis. • Asset Collateral: China Vanke will provide various asset pledges (including operating properties, fixed assets, inventories, construction projects, and unlisted equity interests), generally carrying a loan-to-value ratio between 50% to 70%. If the collateral’s value drops below the stipulated coverage level, China Vanke must provide replacement assets or repay part of the loan. • Proposed Annual Caps: The principal cap remains RMB22 billion throughout the agreement term, while the annualized gross interest cap ranges from RMB214.29 million to RMB566.28 million, reflecting potential changes in LPR over time.
As the transaction represents a continuing connected transaction under Chapter 14A of the Listing Rules, it requires Independent Shareholders’ approval. Shenzhen Metro Group, as a connected person, will abstain from voting at the forthcoming Extraordinary General Meeting (EGM). An Independent Board Committee has been established, and an Independent Financial Adviser has been appointed to advise shareholders regarding the fairness and reasonableness of the arrangement.
The EGM will be convened for shareholder approval of, among other things, the Loan Framework Agreement and the proposed annual caps. A circular containing full details and related documentation is expected to be despatched by 10 November 2025.