(Yicai) Feb. 24 -- Shares of China Vanke rose after the struggling property developer secured the second loan from its largest shareholder Shenzhen Metro in 11 days.

Vanke [SHE: 000002] was trading up 3.4 percent at CNY7.88 (USD1.09) as of 10.25 a.m. in Shenzhen today, after earlier jumping as much as 5.9 percent. The stock has gained 8.5 percent so far this year.

Shenzhen Metro will lend Vanke CNY4.2 billion (USD579.4 million) to repay maturing public debts, the Shenzhen-based builder said in a statement on Feb. 21.

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 noted, adding that the collateral will be assets worth up to CNY76 billion (USD10.5 billion), with a pledge rate of 70 percent.

On Feb. 10, Vanke announced it had secured a CNY2.8 billion loan from Shenzhen Metro. The term, interest rate, and pledge rate were the same as the new loan.

The fact that the loans’ interest rate is lower than that of financial institutions and their pledge rate is higher than market standards shows Shenzhen Metro’s full support for Vanke, the firm pointed out.

Moreover, Vanke said in a statement on Feb. 18 that it was partnering with three financial institutions to launch a pre-real estate investment trust fund that will enable the company to recover CNY1.4 billion in cash, thereby boosting its liquidity.

Vanke has 32 outstanding offshore and onshore debts worth a total of over CNY50 billion. Among them, 16 are due for repayment or exercise this year, exceeding CNY30 billion in value.

Shenzhen Metro has supported Vanke through its financial struggles since the second half of 2023 through various means, including land purchases, REIT subscriptions, and shareholder loans. Last year, Shenzhen Metro spent about CNY11.5 billion to back Vanke.

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