Tesla Inc. has secured a new five-year, 10 billion Chinese yuan, or US$1.4 billion, loan facility from a group of Chinese banks for its Shanghai gigafactory, Reuters reported Dec. 23, citing three sources aware of the development.
China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China and Shanghai Pudong Development Bank are among those funding the credit facility, the report said. The loan's interest rate will reportedly be fixed at 90% of China's one-year benchmark interest rate.
Tesla previously secured a 12-month loan of up to 3.5 billion yuan due in March 2020. According to the report, a portion of the new loan will be used to roll over the existing debt and the rest of the amount will be used for the Shanghai facility and the company's operations.
Tesla did not immediately respond to S&P Global Market Intelligence's request for comment.
On Dec. 23, shares of the electric-car maker rallied to cross $420 for the first time and subsequently closed at $419.22. Tesla CEO Elon Musk had previously proposed to take the company private at $420 per share but later dropped the plan amid pressure from shareholders and regulators.
Tesla in October returned to GAAP profitability in the third quarter after cutting substantial operating costs. The company is aiming to deliver its first China-made Model 3 sedans to customers before Jan. 25, 2020.
As of Dec. 23, US$1 was equivalent to 7.01 Chinese yuan.