Beijing Enterprises Holdings is raising a US$150 million syndicated loan in what is seen as a prelude to an expected HK$1.7 billion asset acquisition. Chairman Hu Zhaoguang said the loan would be used as general working capital and to buy assets. The three-year syndicated loan, extendable to five years, is expected to have an all-in price of 145 basis points over the London interbank offer rate. Co-ordinating arrangers are Chase Manhattan Asia, Standard Chartered Bank and the Sumitomo Bank. The arranging phase is expected to be completed in about three weeks. With this loan, the company's gearing will rise to between 33 and 35 per cent from 21 per cent. The company has HK$2 billion in cash. Mr Hu said current liabilities were in yuan but the company would consider hedging with its planned US dollar-denominated syndicated loan. He said the company had not yet received approval from the China Securities Regulatory Commission for its asset purchase plan, which was expected to include a water plant, a winery and a tourism business. Mr Hu believed the yuan would not be devalued but said the company would move to eliminate currency risk as part of its strategic plan. This would come in the form of taking more yuan loans instead of foreign currency loans, he said. He said the company's high-technology and beer businesses were performing well this year although the retail and tourism arms were affected by slowing demand. He said performance this year should be better than last year.