UPDATE: China Exim Bank Says Won't Borrow From Government To Fund M&A
March 10 2009 - 7:16AM
Dow Jones News
Export-Import Bank of China isn't considering borrowing money
from the government to help finance overseas acquisitions by local
firms, Exim Bank Chairman and President Li Ruogu said Tuesday.
Li said Exim Bank has no plans to borrow from the Ministry of
Finance or China Investment Corp., the country's US$200 billion
sovereign-wealth fund.
Li's remarks, made on the sidelines of the National People's
Congress, diverged from comments which appeared last week in a
Reuters story. That piece quoted Li as saying Exim Bank might try
to obtain foreign exchange from the country's sovereign wealth fund
and the central bank.
"All options are open for consideration, including seeking money
from China Investment Corp. and the central bank. But there is no
decision yet," Li was quoted by Reuters.
Exim Bank and China Development Bank are leading a group of
local financial institutions in funding an US$19.5 billion
investment by Aluminum Corp. of China in Rio Tinto PLC (RTP), Xiao
Yaqing, Chinalco's recently departed president, said earlier this
year.
His comment led to concerns that state banks might have to
borrow from the government to finance the big cross-border
deal.
Tuesday, Li also said Exim Bank has applied for an injection of
money from the government to boost its capital base; he didn't say
how much it wanted or which government entity would inject the
funds.
Exim Bank has sought a capital injection since 2007, when it
said it was in talks with the Ministry of Finance; no progress has
been disclosed thus far.
Exim Bank was set up in 1994 as a policy lender to provide
government-directed financing for Chinese import and export
companies. The bank carries a credit rating equivalent to the
country's sovereign rating.
-By Terence Poon and Victoria Ruan, Dow Jones Newswires; 8610
6588-5848; terence.poon@dowjones.com