HONG KONG: Kingway on loan hunt - report
Chinese brewer Kingway is looking to up brewing capacity, according to local reports.
The Standard reported today (11 October) that the brewer, which is the second-largest in Guangdong Province, is on the hunt for a HK$400m (US$51.3m) term loan. The company has invited seven banks, including HSBC and ICBC Asia to bid for the loan, the paper said.
The four- to five-year loan facility will be priced at between 40 and 50 basis points above the Hong Kong interbank offered rate. The mandate will be issued by the end of October, the paper noted.
Kingway plans to use the loan to build plants and for general working capital. The brewer is in the process of investing over CNY1bn (US$126m) in building three new plants in Tianjin, Chengdu and Xi'an, bringing its number of production facilities to seven.
Last month, Kingway posted a 12% dip in first-half profits as marketing costs and initial expenses related to the construction of the breweries in Xi'an and Chengdu ate into earnings.
Heineken holds an indirect 21.44% interest in Kingway through Heineken-APB (China), a joint venture between Asia Pacific Investment (API) and Asia Pacific Breweries. API is a holding company jointly-owned by the Dutch brewing giant and Singapore-based conglomerate Fraser and Neave.
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