Xiaomi Raises $1B Loan for International Retail Expansion

On Friday, Xiaomi Inc, a Chinese smartphone maker, said it had sealed an agreement for a new $1 billion loan for a three-year term to develop its international focus and expand globally with new retail opportunities.

The company unveiled that it has signed a syndicated loan deal from 18 banks across Europe, Middle East, India, China, Hong  Kong and Taiwan. Deutsche Bank and Morgan Stanley served as joint global coordinator for this loan, and Bank of China (Hong Kong) Limited, Deutsche Bank AG and Wing Lung Bank as mandated lead arrangers and bookrunners, it said in a statement.

This move follows previously raised $1 billion syndicated loan in 2014, with a valuation of $45 billion.

Xiaomi founder, chairman and chief executive Lei Jun said, new retail, which is the integration of online and offline retail and globalization are two of the company’s top five strategic places for development.

The loan is intended at further Xiaomi’s key focuses as put forward by CEO Lei Jun this year, which involves growing its international footprint. Currently, the company sells and has sales partners in over 20 countries, and it’s establishing an offline presence.

“The global syndicate of top-tier banks is a strong endorsement of Xiaomi by international capital markets,” Xiaomi Chief Financial Officer Shou Zi Chew said.

Xiaomi, which also makes cameras and TVs, has seen a previous return to form in phone sales after being crushed by competition from rival Huawei Technologies Co Ltd and brands Vivo and Oppo.

The Chinese firm has disclosed 149 Mi Home stores in China and its first in India, where it hopes to reach 100 stores for the next two years. These stores meant to boost the online and offline commerce worlds to allow customers to experience the best of both.

The smartphone maker’s business has gone through a revival this year after two hard years where in its recent impressive sales growth has slowed. This year, it rejected to give complete numbers for 2016, marking its first ever non-reveal in its history, following a noticeably disappointing year as rivals like Huawei, Oppo and Vivo revealed competitive and impressive devices and formed wide offline sales networks. Issues started when Xiaomi didn’t achieve its sales target for 2015, selling over 70 million devices, but not the 80 million that Lei had recently forecast.

In the past quarter, the company said to have shipped 23.16 million smartphones in the second quarter of 2017, an increase of 70% from the previous quarter, making a record for its quarterly smartphone shipments, the company said in a statement.

In China, it surpassed Apple to take third place with 15 million devices sold and show it can accomplish on native soil.

Early this year, Xiaomi sealed a multi-year patent agreement with Nokia, which included Xiaomi’s acquisition of patent assets from Nokia.

Want to get updated on the latest news about the stock market? Subscribe now at Trade12. We will let you know the latest happenings about forex, commodities and economies.