Huawei Investment Holdings applied for approval in order to raise 6 billion yuan ($844 million) in two tranches of bonds worth 3 billion yuan each. This is the first time the company tries the on-shore bond market. The information was released a few hours ago.
Huawei Enters On-Shore Yuan Bond Market
Huawei Investment Holdings will be issuing three-year medium-term notes for the Chinese interbank market. However, there is no specific date for the official launch of these bonds. In a recent prospectus released by the company, they show they applied for approval to be able to raise as much as 20 billion yuan ($2.8 billion).
A spokesperson of the company commented:
“The bond market in China is developing rapidly…With this bond issuance, Huawei plans to tap into the Chinese bond market, diversify its financing channels and improve its overall financing plan.”
The goal is to use the funds in order to expand their business, invest in information and communication technology and in infrastructure. It is worth pointing out that the company is facing legal issues with the United States and other countries. The company is being accused of being involved in spying.
Washington is also threatening the company to cut its access to U.S. components and software. Earlier this year, Poland arrested a Huawei worker on allegations of spying for China. In addition to it, Poland and the United States have recently signed an agreement to cooperate on 5G technology and reduce Huawei’s presence in the region.
As reported by Reuters, Huawei registered a revenue growth of 23% to 401.3 billion yuan in July. Moreover, the firm was able to make a net profit of 59.3 billion yuan after having revenue of 721.2 billion yuan last year.
The decision to enter the Chinese market in order to raise funds could be a strategic move in order to reduce its dependency on Western countries and investors. Moving into the Chinese may offer the company the possibility to keep growing despite the accusations it received from other countries in the Western hemisphere.
