Chinese smartphone and smart device maker Xiaomi Inc. says its wholly owned subsidiary Xiaomi Hong Kong has signed a three-year US$1 billion syndicated loan agreement with a group of banks to fuel its globalization and open more offline stores.
Led and underwritten by Bank of China (Hong Kong), Deutsche Bank and Wing Lung Bank, with Deutsche Bank and Morgan Stanley acting as coordinators, the syndicated loan will be used to refinance Xiaomi Hong Kong’s US$1 billion syndicated loan issued in 2014.
Lei Jun, Xiaomi’s chairman and CEO, said the new syndicated loan will help finance Xiaomi’s globalization plans, which he believes is critical for company’s future growth.
Xiaomi’s smartphone shipments set a new record during the second quarter of this year, reaching 23.16 million units, up 70% quarter-on-quarter.
The company has also said it will shift its focus towards hardware, new retail (a concept initially named by Alibaba’s Jack Ma referring to an omni-channel retail model) and Internet. Previously, the company focused on software, hardware and Internet.
The change highlights Xiaomi’s shifting attitude toward offline stores. From a purely online retailer during the company’s first few years, Xiaomi has opened 149 brick-and-mortar stores since last year. Lei Jun has said that he hopes the company’s offline stores will reach 1,000 within three to four years. The US$1 billion loan will provide the capital needed to turn those plans into reality.