The five banks in the syndicate comprise Bank of China (Hong Kong) Limited, Fubon Bank (Hong Kong) Limited, China Construction Bank Corporation, Hong Kong Branch, CITIC Ka Wah Bank Limited and Agricultural Bank of China, Hong Kong Branch. CITIC Ka Wah Bank Limited is acting as lead agent for the facility.
This four-year facility is the largest ever club deal so far closed by the Company, and carries a competitive interest rate of LIBOR plus 52 basis points, demonstrating the confidence of the participating banks in the Company’s long-term prospects. The proceeds of the facility will be used by the Company and its subsidiaries to meet general corporate funding requirements, including further quality improvement imperatives in its steel manufacturing plants in China.
Commenting on the transaction, Mr. Cao said: "We are very encouraged by the active participation of these leading banks in the syndication, as it indicates their full confidence in the Company’s business strategy and growth potential. With the completion of this arrangement, we are in an even stronger financial position to extend our leadership in heavy steel plate making business in China, and to tap into new product and service initiatives."
A major portion of the Company’s steel-plate output is delivered to some of the world’s largest shipbuilders like Korea’s Hyundai Heavy Industries. Demand in the sector is currently growing much faster than production capacity, with substantial order backlogs at shipyards. China, the world's largest steelmaker, has already overtaken Japan as the number-two shipbuilder in the world. To sustain this positive momentum, the PRC Government has earmarked shipbuilding as one of the country’s top development priorities.
"The timing of the facility is crucial as strong economic fundamentals in China continue to underline the need for sustained development of her steel making and shipbuilding industries. The Company enjoys a dominant position in the steel industry, and intends to stay competitive by leveraging its strong financial resources to drive further growth in both capacity and capability," Mr. Cao added.
The Company has also recently pledged efforts to increase its capital contribution to its steel plants in Qinhuangdao City, Hebei province. In a move to enhance margins it has also announced plans to develop further value-added services such as heat treatment facilities and downstream processing of steel-plates. Such demand-driven expansion plans will continue to underpin the Company’s growth momentum.
About Shougang Concord Issued by : Through :
Shougang Concord International Enterprises Company Limited (HKEx: 697) is principally engaged in the manufacture, sales and trading of steel products, shipping and in electricity generation. The Group also holds about 21% interest in Shougang Concord Century Holdings Limited (HKEx: 103) as at 31 December 2007.
Shougang Concord International Enterprises Company Limited
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