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Hundreds of Chinese Companies Seek Billions in Loans Due to Coronavirus: Reuters

By Ding Yi / Feb 12, 2020 05:51 PM / Business & Tech

Photo: VCG

Photo: VCG

Smartphone maker Xiaomi and ride-hailing giant Didi are among more than 300 businesses in China approaching banks for a total of more than 57.4 billion yuan ($8.2 billion) in loans due to financial impacts of the new coronavirus outbreak, Reuters reported Monday, citing bank sources.

The ongoing COVID-19 epidemic, previously referred to as 2019-nCoV, which has killed more than 1,000 people worldwide by Wednesday, has brought large parts of the country to a standstill as cities implemented quarantines, shut down transportation, and delayed resumption of work following the Lunar New Year holiday.

The sources, which received copies of two lists of company names sent to Beijing banks by the city’s finance bureau, said that the companies seeking loans are either contributing to the battle against the epidemic or have been badly hit, Reuters reported. To help them get through the public health crisis, Beijing’s banks will extend preferential loan rates, the sources added.

Online-to-offline service provider Meituan Dianping, artificial intelligence startup Megvii and cybersecurity firm Qihoo 360 were also reported to be on the lists.

According to the sources, Xiaomi is seeking loans of 5 billion yuan to produce medical resources such as masks and thermometers; Meituan Dianping is borrowing 4 billion yuan, some of which will be used to finance free food deliveries to frontline medical workers in the epicenter of the outbreak; and Didi is seeking 50 million yuan, Reuters reported.

The outbreak of the coronavirus strain, renamed COVID-19 by the World Health Organization Wednesday, could cause disruptions to global supply chains as industries struggle to resume manufacturing following national holidays that were extended on epidemic fears. Research firm IDC has predicted that China’s smartphone shipments may drop by more than 30% in the first quarter this year due to the outbreak.

Contact reporter Ding Yi (yiding@caixin.com) and editor Dave Yin (davidyin@caixin.com)

Related: Electric Car Maker Nio’s January Sales Plummet Amid Epidemic


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