US electric vehicle maker Tesla and a group of China banks have agreed on a new RMB 10 billion ($1.4 billion) five-year loan facility for the automaker’s Shanghai car plant, part of which will be used to roll over an existing loan, reported Reuters.
China Construction Bank (CCB), Agricultural Bank of China (AgBank), Industrial and Commercial Bank of China(ICBC) and Shanghai Pudong Development Bank (SPDB) are among the banks which have agreed to give Tesla the financial support, said a Reuters source.
The Chinese banks earlier this year already offered Tesla a 12-month facility of up to RMB 3.5 billion, which is due to be repaid on March 4, 2020, according to a filing the automaker made to the US Securities and Exchange Commission.
That new loan will be partially used to roll over the previous RMB 3.5 billion, the rest will be used on the factory and Tesla’s China operations. The new loan’s interest rate will be pegged at 90% of China’s one-year benchmark interest rate, the same as the RMB 3.5 billion loan. This is a rate that China banks offer to their best clients.