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China Hongqiao secures 30B yuan financing to upgrade manufacturing facilities

China Hongqiao Group Ltd. said June 6 that it secured a 30 billion Chinese yuan financing agreement with Industrial Bank Co. Ltd. to upgrade its manufacturing facilities.

Industrial Bank will provide the aluminum producer and its affiliates with services, including supply-chain financing, debt instruments, industrial funds and asset-backed securitization to help it raise money, Reuters reported, citing a company statement.

China Hongqiao, described by the newswire as the world's biggest aluminum producer, is aiming to create a "world-renowned" production base for lightweight automobile parts and other high-end applications for aluminum, Chairman Zhang Shiping said in a statement.

For full year 2017, China Hongqiao's attributable net profit slipped 25.3% to 5.12 billion yuan due to smelting capacity cuts of 2.68 million tonnes as part of China's intensified crackdown on illegal production. The company also reported impairments of about 5.68 billion yuan for the period.

China Hongqiao issued US$450 million in bonds in April to refinance debt and for general corporate purposes, the report added.

In April, S&P Global Ratings upgraded the long-term issuer credit rating of China Hongqiao to B+ from B based on its improving liquidity.

As of June 5, US$1 was equivalent to 6.41 Chinese yuan.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.