Cheung Kong Infrastructure Holdings is in discussions with banks to take out yuan-denominated loans to fund its mainland investments, according to executive director Edmond Ip Tak-chuen. The move follows an earlier decision by New World Development to use yuan loans for its mainland investments, citing its relative stability compared with other regional currencies. Chairman Victor Li Tzar-kuoi emphasised the discussions were exploratory and added the company had no urgent cash funding needs at present. According to the company's latest annual report, if a cash balance of $2.39 billion is taken into account, the group had net debt of $703 million at the end of last year. The net debt to equity ratio was 3.8 per cent and the interest coverage for the year was 17 times, higher than 16 times in 1996. The company's loans are presently denominated mainly in US dollars. Last year, the group entered certain currency and interest rate swap transactions which effectively converted Hong Kong dollar-denominated bank loans into US dollar liabilities, which bear interest rates with reference to the London Interbank Offered Rate or US dollar fixed interest rates. Mr Li's statement came the same day Cheung Kong (Holdings) and Hutchison Whampoa announced the forthcoming launch of the first phase of their Tierra Verde joint venture at Tsing Yi Station later this month. The 12-tower project, comprising 3,500 flats, will be the first airport railway station residential project to come on the market. It is 60 per cent owned by Hutchison, 20 per cent by its substantial shareholder Cheung Kong (Holdings) with the balance held by Citic Pacific. The first phase of Tierra Verde comprises 1,474 flats in five blocks but no price list was disclosed yesterday.