China Vanke Chairman Abruptly Resigns From Stressed Builder

The resignation of China Vanke Co.’s recently appointed chairman is another blow to the embattled developer facing liquidity challenges.

Xin Jie, who moved into the chairman role following a sudden management overhaul in January, has applied to resign from all his positions, including chairman, the developer said in a stock exchange filing with the Hong Kong stock exchange on Monday. According to the filing, Xin’s resignation was due to personal reasons.

Vanke also selected Huang Liping, party vice chairman and general manager of Shenzhen Metro, as chairman. Huang has served as a board member at Vanke since 2021.

The surprise development threatens to further cloud the outlook for Vanke, whose financial situation is already weak due to onshore debt maturities. Vanke is counting on steady liquidity support from its largest state shareholder, Shenzhen Metro Group Co., which Xin has chaired for the past eight years.

Xin, 59, spent most of his career at state-owned firms in the southern city of Shenzhen. He earned a bachelor’s degree in engineering from a university in the industrial city of Shenyang in the 1980s, when China’s economy was in the early stages of opening up.

After working in various industries in Shenzhen, from foreign trade to hotels, Xin joined the city’s state-owned construction company Shenzhen Tagen Group in 2009, where he later took on the role of president.

Xin has been appointed chairman of Shenzhen Metro, the city’s state-owned transportation company, since late 2017. Just before his appointment, the company became Vanke’s largest shareholder following a bitter ownership battle.

This January, Xin took over as chairman of Vanke from Yu Liang due to the firm’s mounting losses. The company, once China’s biggest developer, has become the latest flashpoint in the country’s long-running real estate crisis, highlighting the severity of the industry’s challenges.

Vanke reported a loss of 11.95 billion yuan in the first half, up from the previous year. Fitch Ratings also downgraded its long-term issuer rating to CCC- in August; This reflects the further weakening of China Vanke’s liquidity.

According to Vanke’s provisional report, this year Shenzhen Metro has offered a large number of loans, totaling about 23.9 billion yuan. The loans were allocated in full to help Vanke repay the principal and interest on publicly traded bonds. In September, Vanke announced that it would receive another loan of 2.06 billion yuan from Shenzhen Metro.

“Vanke’s strong relationship with the government and asset divestitures could be key to closing the funding gap,” Bloomberg Intelligence analysts Daniel Fan and Hui Yen Tay wrote in a recent report.

This article was generated from an automated news agency feed without modifications to the text.