Home

Ping An denies plans to acquire Country Garden

PUBLISHED

2023-11-09

Content

Chinese insurer Ping An has denied any intentions to acquire the troubled property group, Country Garden. This denial comes in response to a lengthy Reuters report that claimed the Chinese government had requested Ping An to lead the rescue efforts for the country's second-largest developer.

The Reuters report, published late Wednesday, garnered significant attention. According to Reuters, sources familiar with the rescue plan revealed that China's State Council, led by Premier Li Qiang, had instructed the Guangdong provincial government (where both companies are based) to facilitate Country Garden's rescue with the assistance of Ping An.

Ping An refuted the claim that it had been asked to spearhead the rescue effort, asserting that talks between the government, China's central bank, Ping An, and Country Garden had been ongoing since August. Given their common base in Shenzhen, the Guangdong provincial government had been tasked by Beijing to oversee the bailout, as per Reuters sources.

In a statement filed with the Shanghai Stock Exchange, Ping An clarified that it neither holds any shares in Country Garden nor harbors any plans for acquiring the Chinese developer. Furthermore, it emphasised that it had not received any such request from the government.

Bloomberg corroborated this account, citing insiders who reported that Ping An had divested its 4.9% stake in Country Garden (disclosed in August) in the last quarter.

This Reuters report emerged three days following the revelation of a support package for China Vanke, the country's second-largest property developer still in operation. State-owned Shenzhen Metro, Vanke's largest shareholder, disclosed its readiness to provide 10 billion yuan ($1.4 billion) worth of "market tools" to bolster Vanke.

During an online call with financial institutions on Monday, Shenzhen's State-owned Assets Supervision and Management Commission expressed confidence in Vanke's stability and affirmed its ample financial resources and tools to support the builder, if necessary.

State-owned Shenzhen Metro Group also clarified that it has no plans to reduce its stake in Vanke and is actively preparing to purchase Vanke's publicly-traded bonds when the timing is right.

Based on the reactions to both stories, it appears that the rescue efforts for Vanke are more advanced compared to the initiatives to support Country Garden.

Notably, Ping An, the largest shareholder in HSBC, Asia's banking giant with a stake of just over 8%, has been advocating for the bank's breakup.

Author