Chinese tech giants and IPO hopefuls woo banks for loans as coronavirus shuts access to equity markets
- Xiaomi mulls syndicated loan and US dollar-denominated bond issue in 2020, people familiar said
- Lufax seals a three-year US$1.29 billion loan; Trip.com seeks US$1.2 billion loan
Some of China’s fastest-growing companies are rushing to credit markets for billions of dollars in loans after the global stock rout caused all-in borrowing costs to tumble and shut companies out of the equity markets.
Chinese smartphone maker Xiaomi Corp and travel specialist Trip.com Group are among the largest new-economy firms talking to banks for fresh loans, according to people familiar with their plans. Chinese online wealth management platform Lufax told the Post it was in the final stages of sealing a US$1.29 billion loan from eight banks.
The market rout stoked by the coronavirus pandemic and oil-price collapse is pushing corporate treasurers to replenish funds for different reasons. Chinese start-ups that were preparing for an initial public offering are now locked out of the market as risk appetite and valuations collapsed.
Some are seeking to alleviate a liquidity crunch to keep their business going or to repay maturing debt, bankers said, while the stronger ones are seizing the opportunity to grab market share or buy their competitors. Lufax said its loan would help “fuel business growth”.
