Smartphone maker and consumer electronics manufacturer Xiaomi (HKEX: 1810) will raise USD 600 million through a senior note offering, as said in the filling the company submitted to the Hong Kong Stock Exchange on Thursday.
While the capital raised is purposed mainly for general corporate operations and debt repayment, Beijing-base Xiaomi may also reallocate the use of the net proceeds “in response to unforeseen events or changing business conditions,” said the statement.
The notes, issued through its wholly-owned subsidiary Xiaomi Best Time International Limited, carries an annual interest of 3.375% and will mature in 2030.
Many Chinese businesses have sought bank loans to overcome the business disruptions from the coronavirus outbreak, according to a February report done by Reuters.
Huawei, China’s biggest smartphone maker, is also planning on issuing medium-term notes worth RMB 2 billion (USD 280 million) with an interest rate ranging between 2.8% to 3.4%, as China Securities Journal reported earlier this week.
Xiaomi experienced a disruption in production for as long as two months this year, as revealed in their latest financial report. As of late March, the company’s production capacity has recovered to 80%–90% of normal levels.
Research institute Strategy Analytics expects global smartphone shipments to drop by 10% in 2020, including a 15% drop in the Chinese market.
