China’s largest private oil group was scrambling for loans even as authorities were swooping in
CEFC has approached several non-traditional financial institutions, and sought out loans with higher-than-market rates to refinance its acquisitions
CEFC China Energy, the once-acquisitive conglomerate, was prepared to pay annual rates of as much as 36 per cent for short-term funding in a sign of the cash crunch faced by the company as authorities were closing in on its chairman, according to multiple people with knowledge of the matter.
Earlier this month, it was revealed that Ye Jianming, the company’s chairman, had been investigated for suspected economic crimes.
Guosheng Group, an investment firm owned by the Shanghai government, was tasked with evaluating CEFC’s financial position as part of a restructuring and takeover process, according to two sources with knowledge of the moves.
But from at least the second half of last year, CEFC was approaching shadow bankers - non-traditional lenders - for costly short-term loans, said six sources with direct knowledge, in a sign of the strained liquidity the company was facing.
In early January, CEFC borrowed 1 billion yuan (US$158.00 million) from the Shanghai-based Bida Holding Group, also known as U.Trust Holding Group, for a 15-day loan with a daily interest rate of 0.1 per cent, equivalent to an annual interest rate of 36 per cent, said one person with direct knowledge of the matter.
