PAINT and mixed solvent manufacturer Yip's Hang Cheung (Holdings) is arranging a $200 million syndicated loan to fuel its expansion in China. Director and financial controller George Ng said the syndication, which was being arranged by Rabobank Nederland, would comprise a $100 million term loan and a $100 million revolving facility for working capital. He expected seven to eight international banks would be involved in the three-year syndication, which would carry an interest rate of 1.375 percentage points above HIBOR. The loan would be used to finance the development and expansion of production facilities in Zhongshan, Dongguan, Hainan, Jiangmen and Zhanjiang, he said. He said the loan would be sufficient to fund the group's expansion plans in China over the next few years. Group chairman Tony Ip Chi-shing said it was the first time Yip's Hang Cheung had sought finance through a loan syndication. He said his company had also studied the possibility of raising funds by way of a share placement or new issue. But he said the company believed that a loan syndication was now the best and most economical method of funding. Mr Ip said he did not favour seeking finance by way of a new issue which would result in a dilution of earnings per share. ''We are not worried about financing if we have good potential projects,'' he said. With the additional production facilities from new plants, he expected that the company would see stronger business growth this year.
