Tesla Inc and a group of China banks have accepted a new 10 billion yuan ($1.4 billion), five-year loan facility for the automaker’s Shanghai auto plant, three sources knowledgeable with the matter stated, part of which will be used to roll over a present loan.
China Construction Bank (CCB), Agricultural Bank of China (AgBank), Industrial and Commercial Bank of China (ICBC) and Shanghai Pudong Development Bank (SPDB) are some of the banks that have agreed to provide Tesla the financial support, one source with direct information said.
The Chinese banks previously this year already offered American automaker a 12-month facility of up to 3.5 billion yuan, which is due to be repaid on March 4, 2020, as per a filing the automaker made to the U.S. Securities and Exchange Commission.
That new loan will be partially used to roll over the past 3.5 billion yuan ($500 million) debt, according to the first source. The second source stated the rest will be spent on the factory and Tesla’s operations in the country.
The recent loan’s interest rate will be pegged at 90% of China’s one-year benchmark interest rate, similar to the 3.5 billion yuan loan, the first source stated. This is a rate that banks of China offer to their best clients.
The automaker broke ground on the factory in January and has started manufacturing vehicles from its Shanghai plant. It intends to build at least 1,000 Model 3 cars a week by the end of 2019.
