Hundreds of Chinese companies seek a total of 57.4 billion yuan in loans Xiaomi drops in the list

More than 300 Chinese companies are seeking bank loans totalling at least Rmb57.4bn ($8.2bn) to help mitigate the effects of the new coronavirus outbreak, two bank sources said, according to Reuters.

Potential borrowers include takeaway giant Meituan Dianping, smartphone maker Xiaomi, web-based car platform provider Didi Chuxing, face recognition startup View and internet security firm Qihoo 360, according to people familiar with the matter. People familiar with the matter said the companies seeking loans were either involved in the epidemic or were hardest hit.

People familiar with the matter said companies seeking loans in Beijing were likely to receive fast approvals and preferential rates, and they had received copies of two lists sent to Beijing’s major banks by the Beijing Municipal Finance Bureau.

The two lists also include the size of the loans sought by the respective companies.

There are no official figures on the total amount of loans companies across the country seeking to fight the outbreak.

“Banks will have the final say on the loan. “Interest rates are likely to be in line with the bank’s best customer rates, ” said one person familiar with the matter. “

Xiaomi is seeking a Rmb5bn ($716m) loan to produce and sell medical equipment, including masks and thermometers, according to the list.

Meituan Dianping plans to seek Rmb4bn, in part to provide free food and distribution to medical staff in the worst-hit city of Wuhan.

Didi Chuxing is seeking a Rmb50m loan “because it has been severely affected by the outbreak”.

Xiaomi’s revenue growth slowed in the third quarter, but gross profit rose 25.2 per cent year-on-year to Rmb8.2bn, according to the exchange. Meituan Dianping has been profitable for the past two quarters.

Beijing-based Qihoo 360 is seeking a Rmb1bn ($143.3m) loan to buy medical-related products and fund apps that track and contain the virus.

Face recognition start-up Mineco has applied for 100 million yuan in technology development funding, including an increase in the recognition of people wearing masks.

Meituan Dianping, Drip, Xiaomi and Mineco declined to comment. Qihoo 360 did not immediately respond to a request for comment.

The Beijing Municipal Government Finance Bureau has yet to respond. But the Finance Bureau has previously said companies could turn to them if they want financial support.

The companies on the list also include vegetable market operators, ambulance manufacturers, environmental companies and other companies that play a key role in maintaining food supplies and containing the outbreak.

“Banks don’t lend to everyone because they need to assess whether they are really able to repay their loans, ” said one person familiar with the matter. “

To help combat the effects of the new coronavirus, Chinese Bank of China has injected capital into the banking system to boost market confidence. Banks have also been urged to lower lending rates, the banking and insurance watchdogs have urged.

The National Development and Reform Commission and the Ministry of Industry and Information Technology are also compiling and supporting the list of affected companies.