According to recent reports citing Chinese consumer electronics giant Xiaomi, the company has secured a new syndicated loan of $1 billion over a three-year period, and these funds will reportedly be put to use in Xiaomi's plans for creating new global retail opportunities. The syndicated loan was covered by a total of 18 banks across Europe, the Middle East, China, India, Hong Kong and Taiwan, and according to Xiaomi CFO, Shou Zi Chew, this represents a "strong endorsement" of the original equipment manufacturer (OEM) by signaling that banks have faith in the company.
Specifically, the syndicated loan agreement was signed with Deutsche Bank, while Morgan Stanley acted as a joint global coordinator. Additionally, Deutsche Bank AG, the Bank of China (Hong Kong) Limited, and Wing Lung Bank acted as mandated lead bookrunners for the deal. Xiaomi's plans to further expand globally have been confirmed for at least a year now, with the company's CEO Lei Jun previously saying that Xiaomi intends to build more than 1,000 physical stores worldwide within the next couple of years. Earlier this year, the company's first Mi Home Store was opened in India, and back in June, the company launched its first brick-and mortar store in Athens, Greece, in collaboration with local IT firm Info Quest Technologies. Lei claims that globalization and establishing new online and offline retail channels are two of Xiaomi's "top five strategic areas for development" moving forward, and having said that, the new syndicated loan will further fuel the company's plans in these particular areas. Of course, in order for new retail channels to be a viable solution for expansion, the company needs to remain successful in the smartphone business, and judging by recent news, Xiaomi seems to be fairly secure in this regard. According to a previous financial report, Xiaomi managed to ship 23.16 million smartphones throughout Q2 2017, representing an increase of 70 percent compared to the first quarter of the year.
This isn't the first syndicated loan to have been signed by the Chinese consumer electronics giant. Back in 2014, Xiaomi managed to secure a similar syndicated loan worth $1 billion over a three-year period ending 2017, and the company has a much larger global presence now than it did in 2014, indicating that its previous move was a success.