Anhui Conch Cement Co, China’s biggest cement maker, increased its first syndicated loan by 60 per cent to CNY800m (US$99m) as banks offered to lend more than it sought.
The Wuhu-based company plans to sign the three-year loan today with 11 banks, said Oscar Tang, vice president of loan syndication at BNP Paribas SA in Hong Kong, one of the deal’s arrangers. The company initially sought 500 million yuan.
Banks are keen to lend to Anhui Conch because it’s one of the most profitable cement producers in China, Tang said in an interview. There are more than 5,000 cement makers in China, generating sales of 112.2 billion yuan in the first half, according to the China Cement Association.
Anhui Conch’s profit fell 75 percent to 226.9 million yuan in the first nine months from the same period in 2004 as fuel costs rose and prices for its products fell.
The company will pay interest on the loan that is 90 percent of People’s Bank of China’s lending rate, the lowest rate permitted under central bank regulations for yuan loans, Bloomberg data show. The three-year PBOC lending rate is 5.76 percent.
The company got 1.1 billion yuan of private bank loans in the first half of this year to expand, according to its latest earnings report on August 25.
