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China XD Plastics Gets $135 Million Loan for Refinancing

Anthony Russo 2019-10-08 10:00 AM

China XD Plastics Co. Ltd. (Nasdaq: CXDC) announced its subsidiary has signed a loan agreement of $135 million with a group of banks.

The loan to Xinda Holding (HK) Co. Ltd. will carry a 2% annual interest rate and has a 364-day term, payable every three months, according to last week's statement by CXDC. 

The consortium of banks providing the loan are led by the Industrial and Commercial Bank of China (Macau) Ltd (ICBC). Participating banks are Standard Chartered Bank (Hong Kong) Ltd., China CITIC Bank International Ltd., Ping An Bank Company Ltd., China (Shanghai) Pilot Free Trade Zone Branch and Bank of Shanghai (Hong Kong) Ltd., among others.

Jie Han, the chairman and chief executive officer of CXDC, said in the statement, "This financing will provide additional liquidity and financial stability to our company. We look forward to broader long-term cooperation with ICBC and other banks of the Consortium."

Han also added in a statement on Thursday, “In the past few years, ICBC has been leveraging its global service network to actively provide comprehensive financial support for Chinese companies going global and China's 'One Belt and One Road' initiative.”

CXDC makes polymer composite materials primarily for automotive applications. It products are used for exterior and interior trims at 31 car dealers in China, including luxury brands such as Audi, Mercedes Benz and BMW. 

The funds will be used to pay for the refinancing of Xinda's debt, as well as for the fees and expenses in the refinancing, according to CXDC’s statement.

CXDC produced strong second-quarter financials in August. It reported revenue reached $463.1 million, up 46% year-over-year. Its profit grew to $40.1 million, an increase of 47% compared with the same quarter last year.

CXDC’s stock fell 4%, to $2.18 per share, on Monday.