As investors' concerns about Vanke's debt crisis intensify, the global restructuring advisory firm Houlihan Lokey Inc. has begun to reach out to Vanke's dollar bondholders, seeking to provide consulting services and possibly form a creditor coordination group. This move marks a further escalation of Vanke's liquidity pressure and may signal the start of a formal restructuring process. Referring to Evergrande's past experience, the formation of this creditor group seems to indicate that Vanke is shifting from 'delayed negotiations' to 'collective coordination.' If the restructuring is initiated, it will involve asset disposals and debt-to-equity swaps, which may exacerbate market volatility in the short term, but in the long run, it will help mitigate systemic risks in the real estate industry.
The future of Vanke may have several possible outcomes:
1. Orderly restructuring. Entering a formal restructuring process like Evergrande, with creditor coordination, asset disposals, and debt-to-equity swaps. During this process, stock prices usually remain under pressure, but there may ultimately be room for survival. The time frame could be 1-3 years.
2. Disorderly default. If coordination fails, more aggressive debt treatment may be faced, and shareholder equity may be significantly diluted or even wiped out.
3. Acquisition/rescue. Shenzhen Metro is in a tough spot; will there be other big players stepping in?
Next, should we cherish Vanke at 4 yuan or Vanke at 3 yuan? Or will it rebound to 5 yuan or 6 yuan?
If you have both expectations and fears about Vanke—under such circumstances, it's usually best not to enter the market.
