China Builder With $48 Billion Credit Seeks U.S. Projects
China Communications Construction Co. (1800) said it has access to at least 300 billion yuan ($48 billion) of credit lines from local banks as it seeks to invest in infrastructure projects in the U.S. and other developed nations.
The company is looking to help fund, build and operate ports, highways and bridges, Liu Wensheng, the chairman of its overseas financial arm, said in an interview in Hong Kong yesterday. It is also working with a global private equity fund to help find opportunities, he said, declining to elaborate.
“The credit facilities give us solid backing for investing in projects in developed countries,” Liu said. The credit lines include a 170 billion yuan agreement with China Development Bank Corp. The Beijing-based builder, China’s No. 2 by market value, won’t set a total investment target.
China Communications, which made sections for the new San Francisco Bay Bridge, and other Chinese builders are expanding overseas as slower domestic growth saps demand at home. Financing from state-controlled lenders may gave them an edge on overseas competitors as foreign governments trying to pare budget deficits ask construction companies to help pay for projects.
China State Construction Engineering Corp., the nation’s biggest builder by market value, has also signed a 100 billion yuan agreement with China Development, according to a Dec. 18 statement. The funds will support the builder’s domestic and international plans, it said.
China Communications’ plans to invest in projects in developed countries mark a change to its work in Africa, where it only acts a contractor, Liu said. The company’s Africa projects include a highway in Ethiopia, and port facilities in Sudan and Mauritania.
“We want to invest in developed countries because of the stable legal environment and their requirement for quality construction,” Liu said. Overseas markets accounted for about 11 percent of the builder’s 294.3 billion yuan of sales last year, according to data compiled by Bloomberg.
The company may invest in a proposed container port in Louisiana, EvangelineToday.com reported last month. The builder is assessing potential harbor projects overseas, Liu said, declining to give examples. The company is China’s biggest port builder.
China Communications, which is also working on a stadium in Qatar for the 2022 soccer World Cup, dropped 0.9 percent to close at HK$7.49 in Hong Kong trading today. It has risen 23 percent this year, matching the gain for the benchmark Hang Seng Index.
China State Construction said last year that it planned to invest as much as $2 billion in the U.S. as part of an overseas expansion push. Third-ranked China Railway Construction Corp. is working on a new stadium for Italian soccer team Inter Milan.
To contact the reporter on this story: Jasmine Wang in Hong Kong at Jwang513@bloomberg.net
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