Huawei Technologies Co is mulling seeking for funding from a small group of lenders, perhaps to fund its chips and mobile business. The latest move comes about a week after Washington first imposed strict limits on Huawei and its affiliates that makes it almost impossible for American firms buy Huawei products or sell American-made components to the company.
According to insider source who prefers anonymity, the Chinese phone maker is looking at securing about $1 billion funding with maturities of five and seven years from outside its national boundaries. Whether or not the plans have been on the card before it got hit by the current ban from White House remains to be known.
Gizchina News of the week
While Huawei has yet to confirm the report, the inside source hinted that discussions about the loan just began, so it is not certain the deal will make it through, if it does goes through, the loanâs pricing — as well as the identities of the participating banks — could provide further clues on the marketâs perception of Huaweiâs 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.
President Trump earlier today hinted that Huawei is a victim of the lingering US-China trade war which further questions the authenticity of the accusation levied on the firm by the US. authorities. A source from Beijing on Friday hinted that there are no plans for a Trump-Xi meeting, so Huawei business is expected to remain at its lowest ebb for the time being.
