Coolpad obtains fresh funds for 4G smartphone expansion

Coolpad Group, the third-biggest smartphone supplier on the mainland, is poised to boost its 4G mobile phone development plans and global expansion with new financing worth as much as US$175 million.

Shenzhen-based Coolpad, formerly known as China Wireless Technologies, obtained yesterday a US$107 million, three-year loan facility through a syndicate of mostly Taiwanese banks, according to the firm's filing with the Hong Kong stock exchange.

In addition, a so-called greenshoe option of up to US$68 million can be exercised under that facility. This option allows underwriters to sell more shares than originally planned by the issuer if demand is higher than expected.

Guo Deying, chairman and chief executive at Coolpad, said in the filing that the amounts borrowed would be used for the group's "growth initiatives", capital expenditure, general corporate purposes and payment of fees related to the loan facility.

CTBC Bank and UBS Bank served as lead arrangers and bookrunners for the facility.

Ricky Lai, an analyst at Guotai Junan International, said the borrowings would support Coolpad's development and launch this year of 30 new 4G smartphone models, many priced at lower than 1,000 yuan (HK$1,255) each, as China Mobile, China Unicom and China Telecom roll out 4G mobile services to more mainland cities.