As a business between the United States and China escalates, Huawei is seeking funding. More precisely, the company intends to borrow a loan of $ 1 billion from a small group of people in its first major funding trial after the US ban. According to insiders who refused to give the name, Huawei is currently aiming for maturity of five and seven years.
Now, nothing is really embedded in the stone, and it is still in the early stages of discussion. As for us, many details can still be changed, and there is no confirmation that the transaction will take place. If this happens, the price of the loan, as well as data on the participating banks, can provide additional information about Huawei’s market perception of financial stability.
As of December, the company had 37 billion yuan ($ 5.3 billion) of unsecured bank loans, of which 2.8 billion yuan had to be paid within one year or less, according to the 2018 annual report. Cash and cash equivalents were about 2.6 times more than total borrowings.
Huawei’s last fund-raising attempt occurred about four months after receiving a loan of 14 billion yuan from five Chinese banks. In September, the company raised $ 1.5 billion from a group of 10, mostly international banks.
Trump spoke at a press conference announcing a $ 16 billion aid package for farmers caught up in the US-China trade war when he turned to Huawei, which brings some interesting news. The company was included in a list that requires US firms to obtain permission from the US government to do business with it. This may mean that Huawei still has a chance to work with American companies, although we are not optimistic.