(Bloomberg) -- China Vanke Co. won more support from authorities as its largest state shareholder agreed to provide up to 2.8 billion yuan ($383 million) to help the struggling developer repay outstanding debt.

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Shenzhen Metro Group Co., which holds a 27% stake in Vanke, signed a three-year secured loan agreement with the firm on Monday, according to a filing to the Hong Kong stock exchange. Under the deal, Vanke will provide asset collateral worth up to 4 billion yuan to Shenzhen Metro through an 18% stake in its property management unit Onewo Inc..

“This fully reflects Shenzhen Metro Group’s support for the company,” Vanke said in the filing, adding that the loan agreement “would be the most effective way to raise funds for the group.”

Vanke must repay 5 billion yuan of bonds this month, according to data compiled by Bloomberg. Throughout the year, the cash-strapped developer has $4.9 billion of bonds maturing or facing redemption options. Default worries sent some of its bond prices down by 30% last month and prompted local authorities to step in to bolster confidence.

The financial backing from Shenzhen Metro follows Vanke’s overhaul in late January when two top executives stepped down and the company warned of a record $6.2 billion loss. An official from Shenzhen Metro will take over as chair, while local and state governments in Vanke’s home base of Shenzhen vowed to “proactively support” its operations.

The rare state support signaled that Vanke may be too big to fail, which would have significant implications for China’s housing market and economy. Vanke, which employs about 130,000 people, ranked fifth by sales in 2024.

The loan facility pays a floating interest rate of 76 basis points below the one-year loan prime rate, or about 2.34% as of the announcement date. The initial loan-to-value ratio of the asset collateral is about 70%, which is higher than the prevailing market standard that ranges from 30% to 60%.

(Updates with bond maturities in fourth paragraph; adds chart)

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