(Yicai) Feb. 11 -- Shares of China Vanke fell after the struggling property developer secured a CNY2.8 billion (USD380 million) loan from its largest shareholder Shenzhen Metro Group.

Vanke [SHE: 000002] was trading down 1.5 percent at CNY7.31 (USD1) as of lunch break today. The Shenzhen Component Index fell 0.4 percent.

The loan has a three-year term, with an interest rate of 2.34 percent, equal to the one-year loan prime rate minus 76 basis points, Vanke announced yesterday. The collateral will have a total value of CNY4 billion, with the initially pledged asset being its listed residential property management arm Onewo.

Onewo’s stock [HKG: 2602] fell 1.4 percent to HKD21.65 (USD2.78) as of 11.50 a.m. in Hong Kong today.

The usual pledge ratio for pledge financing is between 30 and 60 percent. However, as Shenzhen Metro is Vanke’s major shareholder, the pledge ratio was set to 70 percent to demonstrate strong support for the developer and boost market confidence, Vanke noted.

Vanke has nine bonds worth a total of CNY21.6 billion (USD3 billion) maturing this year, according to East Money Information’s financial terminal Choice. Among them, four are domestic, worth CNY8.9 billion, and expiring in the first quarter of this year.

Shenzhen Metro has supported Vanke through its financial struggles since the second half of 2023. Last month, Shenzhen Metro’s Chairman and Vanke’s Vice Chairman Xin Jie was appointed chairman and legal representative of Vanke, and four people who worked at Shenzhen Metro and other Shenzhen government-owned enterprises joined Vanke’s senior management team.

Founded in 1998, Shenzhen Metro is a state-owned enterprise directly managed by the Shenzhen State-Owned Assets Supervision and Administration Commission. It builds and operates urban rail transit projects and develops metro resources and properties.

In 2017, Shenzhen Metro invested CNY66.3 billion to acquire a 29.4 percent stake in Vanke.

Editor: Futura Costaglione