Railcom Gets US$1.2b Loan from China Development Bank

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Last updated at: (Beijing Time) Thursday, June 27, 2002

Railcom Gets US$1.2b Loan from China Development Bank

Emerging fixed-line telecom carrier China Railcom said on Tuesday that it got strong financial support from the China Development Bank with a loan worth 10 billion yuan (US$1.2 billion).

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Emerging fixed-line telecom carrier China Railcom said on Tuesday that it got strong financial support from the China Development Bank with a loan worth 10 billion yuan (US$1.2 billion).

This is the second loan. It follows a bank loan to the telecom company last year worth 5 billion yuan (US$602 million).

The two parties signed a co-operation agreement last year saying the bank will provide loans totalling 20 billion yuan (US$2.4 billion) to support China Railcom's spending on basic network construction and technology innovation.

The bank will also provide the telecom firm long-term foreign currency loans and help it issue corporate bonds in the domestic and overseas capital markets.

China Railcom officials said the company is preparing to issue corporate bonds to domestic investors this year.

They said that before China Railcom could go public in the stock market, selling corporate bonds would be an ideal method to absorb capital besides bank loans.

The China Development Bank, a "policy bank," carries out different duties with commercial banks. It contributes to the development of basic infrastructure and high-tech industries.

China Railcom, an emerging telecom carrier, is the only one to land such big loans from the policy bank, company executives said.

Cai Qinghua, China Railcom chairman, said loans from the China Development Bank sped up its transformation from a telecom network of the Ministry of Railways to a public network serving all of society.

He said the China Railcom network has covered 500 large and medium-sized cities.

The telecom carrier made 4.31 billion yuan (US$519 million) last year and is targeting 6 billion yuan (US$722 million) this year, said Peng Peng, China Railcom president.

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