(Bloomberg) -- China Vanke Co. will exit non-core operations and divest assets as the developer seeks to boost liquidity amid the sector’s unprecedented downturn, according to a memo from a shareholder meeting on Tuesday.

The company will “trim down” and adjust its model for raising money, Chairman Yu Liang said in the meeting. It will also exit all businesses except for the three main operations, which focus on property development, real estate management services and rentals. 

“The company has made a comprehensive weight loss plan to coordinate debt reduction and high quality growth,” Yu said. “We will withdraw, clean up or transfer financial investment in other businesses outside the three main operations.”

The chairman also pledged in the meeting to reduce interest-bearing debt by more than 100 billion yuan ($13.8 billion) in the next two years. 

The state-backed developer has become the latest flashpoint in the nation’s property crisis, underscoring the severity of the sector’s challenges. Once China’s largest developer, Vanke now joins a list of large companies including Country Garden Holdings Co. in a fight for survival. 

Vanke said in March that it aimed to reduce interest-bearing debt by more than half in five years. It is also preparing an asset package totaling about 130 billion yuan to use as collateral as it seeks new bank loans, people familiar with the matter said earlier in April. 

Vanke is seeking to assuage concerns about its ability to stave off default. It plans to increase efforts to complete large-scale asset transactions, with a goal of hitting 20 billion yuan every year. 

Its shares have fluctuated wildly, rising 19% on Monday on the expectation of China easing property buying curbs, before tanking 6.4% on Tuesday. The Politburo announced tempered measures for property support, including a pledge to study methods of digesting the current home supply. 

Its dollar notes due in June are trading at about 96 cents, while others due in 2027 are trading at distressed levels of about 43 cents. 

In March, Bloomberg reported that Vanke was 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.

Vanke has also faced market rumors and controversies recently involving a local partner. Executives denied speculation that the government banned managers above the group vice-president level from traveling overseas after a chief partner in Central China went absent without officially taking leave, according to an exchange filing.

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

JPMorgan Chase & Co. lowered its recommendation on the shares to underweight in early April, saying Vanke faces a “challenging” period of deleveraging and relying on the support of banks and state-owned enterprises.

--With assistance from Evelyn Yu.

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