China Rongsheng Heavy Industries Group Holdings Limited, a large heavy industries group in China, has been granted a strategic credit of RMB35 billion by China Development Bank (“CDB”). Both parties signed a strategic collaboration agreement in Hefei today. On top of the RMB30 billion worth of strategic cooperation initiated this August, the agreement represents a further collaboration for a large credit facility between the Group and CDB.
Mr. Chen Qiang, Chief Executive Officer and Executive Director, said, “The rapid development of China Rongsheng Heavy Industries is greatly boosted by long-term support from a number of major financial institutions such as CDB. While the banking sector is tightening monetary policy and standardising financing activities in China, the strong partnership between China Rongsheng Heavy Industries and CDB again reflects the leading position of the Group in the industry and the strong confidence of the banking community in our prospects.”
Mr. Wu Cun Rong, Secretary of CPC Hefei Municipal Committee, Mr. Zhang Qing Jun, Deputy Secretary of CPC Hefei Municipal Committee and Acting Mayor of Hefei Municipal Government, Mr. Song Wei Nong General Manager of CDB Anhui Branch and Mr. Chen Qiang, Chief Executive Officer of China Rongsheng Heavy Industries all attended the signing ceremony.
Pursuant to the agreement, both parties will strengthen cooperation in various areas. Inspired by the concept of “financial department store”, CDB will provide integrated financial services to the Group such as offering support to business development of the marine engine building and engineering machinery, as well as providing credit for asset mergers and acquisitions and restructuring of the Group in compliance with macroeconomic and industrial polices of China.
The credit agreement also includes a basket of financing services including syndicated loan, liquidity loan, trade finance and financial lease. This will effectively replenish the Group’s working capital under the current economic conditions and fortify its operations.
Mr. Chen Qiang concluded, “With the banking sector continuously tightening monetary policy and strictly assessing daily average loan-to-deposit ratio, the tight liquidity condition of the banks in Mainland China has worsened and credit has been restricted. Mainland banks tend to shift their support to renowned enterprises. Since the beginning of this year, China Rongsheng Heavy Industries has secured a number of credit lines worth exceeding RMB10 billion each from Mainland banks including China Everbright Bank, China CITIC Bank and Agricultural Bank of China, representing a strong capital endorsement for the Group’s rapid growth.”
(35 billion Chinese yuan = 5.4719 billion U.S. dollars)
Source: rshi, September 29, 2011