State-owned Chinese developer Grandjoy Holdings Group said it has signed a 10 billion yuan ($1.57 billion) financing facility with China Merchants Bank to fund acquisitions in the country’s real estate sector.
State-owned property firms are expected to acquire more assets from cash-strapped private developers, as Beijing steps up efforts to stabilise and tighten control over a crisis-hit sector that accounts for a quarter of its economy.
Grandjoy said on its official account on WeChat late on Monday the facility would support its acquisitions and come in the form of loans, funds, securitisation and other financing products.
“As a state-owned enterprise, Grandjoy firmly implements the policy to ‘support a housing market that better meets buyers’ rational needs and enhances the healthy development and virtuous cycle of the real estate market'”, the firm said.
Grandjoy is the property unit of Chinese food group COFCO Corp.
In the last two months, the government has taken various measures to restore stability in the sector as developers confront defaults on offshore debt obligations, credit rating downgrades and a selloff in their bonds and stocks.
Those measures included urging banks to provide appropriate lending to developers, simplifying the process for issuance of interbank notes and asset-backed securities, and not including M&A-related loans in the debt ratio caps for state-owned enterprises.
- Reuters with additional editing by Jim Pollard