As things get more and more tense between the US and China, Huawei is seeking funding. More specifically, the company’s looking to borrow a loan of $1 billion from a small group of people in its first major funding test since the US ban. According to insiders who refused to be named, Huawei is currently aiming for maturities of five and seven years.
Now, nothing’s exactly set in stone, and things are still in the early stages of discussion. As far as we’re concerned, a lot of details could still be changed an there’s no confirmation the deal will go through. If it does, the loan’s pricing — as well as the identities of the participating banks — could provide further clues on the market’s perception of Huawei’s financial strength.
The company had 37 billion yuan ($5.3 billion) of unsecured bank loans as of December, of which 2.8 billion yuan were due in one year or less, according to its 2018 annual report. It had cash and cash equivalents of about 2.6 times total borrowing.
Huawei’s latest fundraising attempt comes about four months after it obtained a 14 billion yuan loan from five Chinese banks. In September, the company raised $1.5 billion offshore from a group of 10 mostly international banks.
Trump was speaking at a news conference announcing a $16 billion aid package for farmers caught up in the US-China trade war when he addressed Huawei, which brings some interesting news. The company has been placed on a list that requires US firms get the US government’s permission to do business with it. This could mean Huawei still has a chance of working with US companies, though we’re not optimistic.
(Source)
