Guangdong Enterprises (Holdings) signed a US$70 million syndication loan yesterday to fund its two key investment projects in China and to boost reserve capital for future acquisitions. Director and general manager of Guangdong Enterprises (GDE) Deng Beisheng said about 40 per cent of the loan would help fund the Guangzhou-Zhuhai highway's eastern section and a timber factory in Zhanjiang city, Guangdong. After the loan signing, Mr Deng said GDE had started to inject capital into the 128-kilometre highway project while the construction of the timber plant would start with installation of equipment. GDE and New World Infrastructures each hold a 20 per cent stake in the Guangzhou-Zhuhai Highway Eastern Section Co with the balance held by the Communication Bureau of Guangdong provincial government and its investment arms. Mr Deng said it was difficult to estimate the total GDE would invest in the highway as the route had yet to be finalised. Part of the loan would fund GDE's 70 per cent-owned Guangdong (Zhanjiang) Medium Density Fibre Board factory. He said the Zhanjiang plant would be the largest timber production base within the group with annual capacity of 75,000 cubic metres. The total investment in the Zhanjiang plant is HK$360 million and it would start trial operations early next year. Mr Deng said the rest of the loan would be used to lengthen the debt maturity profile of the group and also as the group's working capital for future development. The US$70 million syndicated loan was provided by 14 international banks from Europe, China, South Korea and Japan. Banque Nationale de Paris, Banque Worms and KEB (Asia) Finance were the co-lead mangers. The three-year term facility has an average life of 2.7 years at 135 basis points over the three-or six-month London Interbank Offered Rate.