(Bloomberg) -- China Vanke Co. is seeking to sell its entire stake in logistics firm GLP Pte, according to people familiar with the matter, as the state-backed developer seeks to amass cash to stave off a debt crisis.

Vanke had held discussions with parties including state-owned investment company Guangdong Holdings Ltd. and a Tianjin-based state-owned firm to exit its investment, said the people, who asked not to be identified because the matter is private. No agreement has been reached, the people added. Vanke bought a 21.4% stake in GLP for about S$3.4 billion ($2.5 billion) in 2018.

Vanke didn’t immediately offer a comment Wednesday, while GLP declined to comment. Calls to Guangdong Holdings’ headquarters went unanswered.

Shenzhen-based Vanke has become the latest flashpoint in the nation’s property downturn, and is seeking to ease concerns about its ability to avoid default. Last weekend, executives including Chairman Yu Liang told brokerages that it’s making plans to resolve liquidity pressure and short-term operational difficulties. 

Vanke purchased the stake in GLP six years ago when the warehouse manager was taken over by a Chinese consortium in a S$15.9 billion buyout and delisted from the Singapore stock exchange. The move came as part of a push to build its logistics business as high-end storage became a thriving corner of China’s commercial real estate market. 

Vanke said at the Sunday investor event that it is willing to sell or pledge any non-core assets for funds as long as terms are appropriate, people familiar said earlier this week, citing management. Some of its regional units are setting up teams for potential asset sales.

It’s not clear how attractive the stake in GLP might be. The company, a former investor darling that has most of its logistics assets in China, has faced concerns about its liquidity because of the nation’s property crisis and economic slowdown. It was stripped of its last investment-grade rating by S&P Global Ratings in November. 

Still, GLP redeemed two dollar bonds worth more than $600 million in recent months, illustrating its financial resilience, according to a Bloomberg Intelligence analysis. The price of its 3.875% dollar notes due in June 2025 has recovered from a record low of 56 cents to trade at 87 cents on the dollar Wednesday.

Meanwhile, Vanke is also preparing an asset package totaling about 130 billion yuan ($18 billion) to use as collateral as it seeks new bank loans, Bloomberg reported earlier this week. 

In March, Bloomberg also reported that Vanke has been in talks with banks over a plan to swap bond holdings worth tens of billions of yuan in principal into secured debt. The swap would help Vanke avoid a public default while giving banks collateral to protect against any potential losses.

Credit rating companies including S&P have downgraded Vanke to junk in recent weeks as plunging home sales worsen its cash woes. The company’s longer-term financial position may deteriorate if it is unable to carry out planned asset sales, S&P said last week. 

Vanke faces a maturity wall in 2025, when 36.2 billion yuan of onshore and offshore bonds come due, according to S&P. As of end-2023, the company had accessible cash of 36.3 billion yuan, the ratings firm estimated.

©2024 Bloomberg L.P.