Shui On Land says it has shored up its financing after securing an 8 billion yuan (HK$9.06 billion) loan from a mainland bank, as it continued to sell stakes in certain projects to strategic partners, including Winnington Capital. The company also temporarily suspended four development projects in Yunnan, with an estimated investment cost of 40 billion yuan, until it sees an overall improvement in market sentiment. Chairman Vincent Lo Hong-sui said the company's capital expenditure would total 10.4 billion yuan over the next two years. 'It is getting difficult to borrow from banks in Hong Kong and overseas,' Mr Lo said. 'But we received approval for a three-year 8 billion yuan credit line from a major mainland bank.' The loan would be used to finance construction and for payment of resettlement costs on various projects, he said after a ground-breaking ceremony at the 8 billion yuan mixed development, Chongqing Tiandi. Mr Lo said the company had cash on hand of 3.3 billion yuan. Shui On has eight projects with a total floor area of 13.1 million square feet at various stages of development in major cities such as Shanghai, Chongqing, Foshan, Wuhan and Hangzhou. Mr Lo conceded that the cost of borrowing had increased as most banks worldwide had tightened their lending policies. He described the raising of US$375 million in Hong Kong recently as a 'painful experience'. 'Originally, a United States bank agreed to lend us US$375 million, but cancelled the arrangement after the collapse of Lehman Brothers Holdings,' he said. 'I only had three weeks left to raise the funds. Although we have sufficient yuan currency on the mainland, we had difficulty converting it into foreign currency [due to the mainland's tightened monetary policy].' Mr Lo denied reports that Shui On had been forced to pay annual interest of 20 percentage points for a US$375 million three-month loan to repay its senior notes, which were due to mature on October 12. The US$375 million mid-term loan was arranged by HSBC and Standard Chartered Bank, he said. 'The loan was charged at a market rate but significantly lower than the report that quoted 20 percentage points,' he said. 'At that interest rate, it would be hard to do any business at all. We did find that some banks were willing to lend to us at outrageous interest rates at that time. There are many thieves during a market crisis!' Kenneth Hung Kam-biu, the chairman of Winnington Land, a wholly owned subsidiary of private equity fund Winnington Capital, said the company planned to double its mainland property investment to US$2 billion over the next 18 months. The company, founded two years ago, invested US$1 billion in stakes in Shui On's large-scale projects in Shanghai, Wuhan and Chongqing. Mr Hung said the firm would likely raise its stake in the 3.6 million square metre Chongqing Tiandi from an existing 25 to 50 per cent over the next several months. Shui On shares fell 1.56 per cent yesterday to close at HK$1.26.