BEIJING- More than 300 Chinese companies are seeking bank loans totaling at least 57.4 billion yuan ($8.2 billion) to help to soften the impact of the coronavirus outbreak, two banking sources said.
Authorities have cordoned off cities, suspended transport links and shuttered facilities where crowds gather, hammering economic growth that one senior economist said could slow to 5 percent or less in the first quarter.
Extended factory closures, meanwhile, will slow manufacturing and weigh on global supply chains.
Among the prospective borrowers are food delivery giant Meituan Dianping, smartphone maker Xiaomi Corp, ride-hailing provider Didi Chuxing Technology Co, facial recognition start-up Megvii Technology Inc and internet security business Qihoo 360 Technology Co, the sources said, adding that the companies seeking loans were either involved in the control of the epidemic or had been hardest hit.
China is fighting to contain the epidemic, which has killed more than 900 people in the country and infected more than 40,000.
The companies seeking loans in the Chinese capital are likely to get fast-track approvals and preferential interest rates, said the sources, who received copies of two lists of company names sent to Beijing banks by the city government’s finance bureau.
The two lists also contained the size of loans sought.
There is no official data showing the total loans Chinese companies are seeking nationwide to weather the outbreak.
“Banks will have the final say on lending decisions,” one of the sources said. “The interest rates are likely to be on par with those offered to banks’ top clients.”
Xiaomi, the world’s fourth-biggest smartphone maker, is seeking 5 billion yuan ($716 million) in loans to produce and sell medical equipment including masks and thermometers, according to the lists.
Meituan Dianping is seeking 4 billion yuan, partly to help finance free food and deliveries to medical staff in Wuhan, the epicentre of the outbreak in central Hubei province.
Privately held Didi Chuxing, “severely impacted by the virus outbreak”, is seeking 50 million yuan.
Exchange disclosures showed that Xiaomi’s third-quarter revenue growth slowed, but gross profit surged 25.2 percent year on year to 8.2 billion yuan. Meituan Dianping has been profitable for the past two quarters.
Beijing-based Qihoo 360 is seeking 1 billion yuan ($143.3 million) to buy medical-related products and finance work on apps to track and contain the virus.
Facial recognition start-up Megvii applied for 100 million yuan to develop technology including means to improve the accuracy of identifying masked individuals in crowds, according to one of the lists.
Megvii declined to confirm the loan or the loan application.
Megvii said it is working to optimise the artificial intelligence-enabled body temperature screening product it launched last week to help fight the virus, by spotting and locating people in a crowd who have elevated temperatures, even if they are wearing masks. Megvii does not verify the personal identities of people wearing masks.
Beijing-based Megvii has sought to raise funds through an initial public offering in Hong Kong, but its efforts were initially delayed after its inclusion on a US trade blacklist over alleged involvement in human rights violations related to Beijing’s clampdown on Uighurs in China’s Xinjiang region. The company has said it “strongly objected” to the US move. — Reuters
