Tue, Mar 13, 2018 - Page 11 News List

CEFC dished out for loan

GIANT IN DISTRESS:Sources said the China-based global energy conglomerate in January took out a 15-day bridge loan at 0.1% interest per day as trust in the firm dissipated

Reuters, HONG KONG and SHANGHAI

CEFC’s single largest source of financing has been China Development Bank (CDB), which was also expected to play a large role in funding CEFC’s US$9.1 billion purchase of a 14.16 percent stake in Rosneft, the Russian oil major, announced last year.

Nomura, one of the banks initially tapped for finance, was later told to step down as CEFC was set to raise US$5.1 billion in short-term loans from Russia’s second-biggest lender, VTB, according to a separate source with direct knowledge of those discussions.

CEFC was in separate talks with CDB to later refinance the short-term bridge loan being offered by VTB, Reuters reported at the time.

CDB and Nomura did not respond to requests for comment.

CDB president Zheng Zhijie (鄭之杰) last week said that the bank was not involved in financing the Rosneft stake purchase by CEFC.

“We have not received an application seeking financing, how can we start considering?” he told Reuters.

Asked how CEFC has performed over its current loans to CDB, Zheng said: “So far they’ve made all repayments on time.”

CEFC Shanghai International Group (上海華信), a subsidiary of the group, has bonds worth 10.1 billion yuan maturing this year, Reuters data showed.

In addition, bondholders will be able to exercise options to sell an additional 3 billion yuan of bonds back to the company in December.

China Lianhe Credit Rating Co (聯合資信), a domestic credit ratings agency, earlier this month downgraded CEFC Shanghai following media reports of an investigation into the chairman of its parent company.

Trade in five bonds issued by the company with a total value of 14 billion yuan has been suspended since March 2.

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