Qoros Auto Co Ltd, Chery’s first JV with a foreign company, is seeking a Rmb3bn 10-year loan for its factory construction project.
Also located in Changshu, the 50-50 JV between Chery and investment firm Israel Corp has mandated Export-Import Bank of China to lead the Rmb3bn loan. Several major state-owned banks are going through internal credit assessment to join the deal, sources said.
The loan is offering a margin of at least 100% of the PBOC rate, according to a source. It repays after a three-year grace period, which is equal to the factory’s construction period, the source said.
Both shareholders will be guarantors of the deal, while the loan is secured by all the assets of the factory construction project.
The deal is slated to close in mid-May.
Established in 2007, Qoros Auto, formerly known as Chery Quantum Auto Co Ltd, launched its first car brand Qoros in November 2011. The brand will go on sale in 2013 in China and Western Europe, a market the company hasn’t yet entered with its own brand name, according to the company’s website.
Qoros has a top team of experienced auto experts and executives from the West, including former Mini chief designer Gert Hildebrand, Reuters reported last November.
Sources said the Changshu factory needed total investment of Rmb7bn. On completion, the factory will have an initial production capacity of 150,000 vehicles per annum, the company website said.
Construction of the factory’s main buildings will be finished by June, before the assembly line is installed, a Qoros spokesman said. The entire factory will be ready to produce cars by the end of this year, he added. But Qoros could not comment on the financing.
At present, the concept to the car the first product 60 trial vehicles are worldwide the most rigorous testing. Has completed the safety performance tests have shown that the concept of consistent products will reach the 2013 European five-star crash safety standards, it will be Chinese car prices for the first time to reach this height. The same time, the concept caused the car the first phase of planning the production capacity of 150,000 units production base in Changshu, Jiangsu Province Economic and Technological Development Zone, is expected to the end of this year to complete the laying of the production line put into production.