The new crown virus affects many domestic companies, and more than 300 companies such as Xiaomi seek loans of at least 57.4 billion yuan

 

Potential borrowers include food delivery giant Meituan-Dianping, smartphone maker Xiaomi, ride-hailing platform provider Didi Chuxing, facial recognition startup MineTV and internet security firm Qihoo 360. Companies seeking loans have either been involved in the containment of the pandemic or have been hardest hit, the people said.

Companies seeking loans in Beijing, which are likely to receive fast-track approvals and preferential interest rates, received copies of two company lists sent to Beijing’s major banks by the Beijing Municipal Government’s Finance Bureau.

The two lists also included the size of the loans sought by the respective businesses. There are no official figures yet on the total amount of loans sought by businesses across the country to fight the pandemic.

“The bank will have the final say on the loan,” said a person familiar with the matter. “The interest rate is likely to be on par with the bank’s best customers.” Xiaomi is seeking a 5 billion yuan ($716 million) loan, according to the list. Manufacture and sale of medical equipment including masks and thermometers. Meituan Dianping plans to seek 4 billion yuan, in part to provide free food and deliveries for medical workers in Wuhan, the epicentre of the outbreak. Didi Chuxing sought a 50 million renminbi loan because it was “severely affected by the virus outbreak”.

According to data disclosed by the exchange, Xiaomi’s third-quarter revenue growth slowed, but gross profit increased by 25.2% year-on-year to 8.2 billion yuan. Meituan-Dianping has been profitable for the past two quarters. Beijing-based Qihoo 360 is seeking a 1 billion yuan ($143.3 million) loan to buy medical-related products and fund apps to track and contain the virus. Face recognition start-up Mine Vision applied for 100 million yuan in technology development funding, including improving the recognition rate of people wearing masks.

Meituan-Dianping, Didi, Xiaomi and Kuishi declined to comment. Qihoo 360 did not immediately respond.

“Banks won’t lend to everyone because they need to assess whether these businesses are really able to repay the loan,” said one of the people.

To help fight the impact of the novel coronavirus, the People’s Bank of China has injected funds into the banking system to boost market confidence. Banking and insurance watchdogs also urged banks to lower lending rates.

  

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