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在线翻译:
szdaily -> Business
Hyundai JV turns to bonds
    2017-September-5  08:53    Shenzhen Daily

HYUNDAI Motor’s China joint venture (JV) plans to issue its first bonds to raise funds.

Beijing Hyundai Motor, a 50:50 JV set up in 2002 with China’s BAIC Motor, has sought authorization from regulators to sell 5 billion yuan (US$759 million) in 270-day notes in China’s interbank bond market.

In a preliminary filing to the National Association of Financial Market Institutional Investors, Beijing Hyundai said that it intended to use the proceeds to purchase components for its vehicles.

It said that the rising costs of bank loans, its main source of financing in China, in response to policies designed to curtail leverage throughout the economy, was the reason it was turning to the bond market for funding.

As at the end of March, the JV’s outstanding loans totaled 6.55 billion yuan with tenors of one and two years. Interest rates on the loans ranged from 3.83 percent to 4.79 percent, according to the filing.

The JV’s problems, however, go deeper.

Last Tuesday, Hyundai Motor said Beijing Hyundai suspended production a week earlier at its four factories in China after a supplier of fuel-tank components refused to provide parts due to non-payment.

Although production resumed Wednesday, South Korean media reported that the US$17 million outstanding payment was still under negotiation.

The incident has raised alarm over the financial woes at the JV. It sold 105,000 vehicles in the April-June quarter, down 64 percent year on year. Hyundai Motor blamed anti-South Korea sentiment in China for the slump.

Market participants said Beijing Hyundai should be able to get regulatory approval for its financing, thanks to the reputation of its heavyweight Chinese partner, BAIC, but warned that selling the notes would be very challenging.(SD-Agencies)

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