(Yicai) Feb. 24 -- China Vanke’s shares rose after the troubled property developer said Shenzhen Metro, its largest shareholder, will provide an additional CNY4.2 billion (USD 579.4 million) loan --  the second in two weeks -- to help repay the builder’s debt.

Vanke [SHE: 000002] finished 2.6 percent higher at CNY7.82 (USD1.08) a share in Shenzhen today, after earlier jumping by as much as 5.9 percent. The stock has gained 7.7 percent so far this year.

The three-year loan carries a 2.34 percent interest rate, which is 76 basis points below China’s benchmark one-year loan prime rate, Shenzhen-based Vanke said in a statement on Feb. 21. In return and subject to shareholder approval, the firm will be required to provide collateral or pledges worth up to CNY76 billion (USD10.5 billion), with a pledge rate of 70 percent, it added.

An interest rate that is lower than what could be secured from a financial institution and the higher-than-average pledge rate underscore Shenzhen Metro’s full support for Vanke, the company pointed out.

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 firm also revealed on Feb. 18 that it is partnering with three financial institutions to launch a pre-real estate investment trust fund that will enable it to recover CNY1.4 billion in cash, thereby boosting its liquidity.

Vanke has 32 outstanding offshore and onshore debts amounting to more than CNY50 billion. Sixteen of them, exceeding CNY30 billion, are due for repayment or exercise this year.

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

The subway operator, which is directly managed by the Shenzhen State-owned Assets Supervision and Administration Commission, invested CNY66.3 billion for a 29.4 percent stake in Vanke in 2017.

Last month, Xin Jie, chairman of Shenzhen Metro and vice chairman of Vanke, was named the developer’s chairman and legal representative, while four people who worked at Shenzhen Metro and other Shenzhen government-owned enterprises joined Vanke’s senior management team.

Editor: Futura Costaglione