Ping An, China’s second-largest insurance group, has denied being asked by the Chinese government to rescue beleaguered property group Country Garden.
A story from Reuters this morning suggested talks had been going on since August about a state-engineered restructuring of the property developer that would see Ping An take a controlling stake.
In a statement, Ping An stated it has not been asked to take over Country Garden.
“We categorically deny this story. It is untrue,” it said in response to Reuters, which had quoted four unnamed sources for its story.
Shares in Country Garden and other listed Chinese property groups rallied strongly on the report, which was published just ahead of the Asian markets close.
Chinese authorities are worried that a run of property company failures would spill into major damage to the economy overall.
Analysts suggested an equity-led rescue by Ping An of Country Garden would be a big boost to confidence in the short term but questioned how long the effect would last.
Last month, CountryGarden, which has more than 3,000 projects under development in China, missed a deadline to pay a US$15 million interest call and is considered in default on its overseas bonds.
Country Garden had total liabilities of 1.4 trillion yuan (US$190 billion) at the end of June.
Reuters noted that Ping An, which is UK bank HSBC's largest shareholder, has been used before by China to bail out struggling firms, notably the rescue of Peking University Founder Group in 2021 and 2022.
Shares in Ping An fell more than 5%.