Creditors vote as countdown to default deadline enters critical hours – Firstpost

China’s prolonged property sector downturn has placed one of its biggest developers at a pivotal juncture, with China Vanke Co approaching the end of a grace period on a $284 million bond, equivalent to 2 billion yuan. Bondholders are voting on whether to give the company more time, with the deadline expiring on Monday, leaving only hours to avert what would be an unprecedented default for a firm long regarded as too important to fail.

Investors are casting final ballots on a proposal that would allow Vanke to delay repayment and extend the bond’s grace period in exchange for cash and revised terms. The result is expected shortly after markets close. Earlier this month, the company failed to secure creditor approval for an initial extension plan, leading to a revised proposal that includes interest payments and a request to lengthen the grace period from five to 30 trading days. Vanke has also held meetings with insurers and banks in Shenzhen as liquidity pressures have intensified.

Market response and wider implications

Ahead of the decision, Vanke’s shares have shown modest movement, edging up slightly in Hong Kong, while onshore trading has remained sensitive. Credit ratings agencies have already downgraded the developer’s debt to levels associated with severe stress. A default by Vanke, once widely viewed as effectively state-backed, would mark a significant escalation in China’s property crisis, which has been characterised by falling home sales, price weakness in major cities, and a series of defaults and restructurings among developers.

If bondholders reject the extension and the payment is not made within the grace period, creditors could formally declare a default, likely pushing the company towards restructuring. The outcome is being closely watched for indications of how China’s policymakers may respond, given the symbolic and systemic importance of Vanke.