Chinese smartphone and electronics company Xiaomi Corp. has revealed plans to raise around $1.2 billion through debt issuance. This development comes at a time when technology companies in China are undergoing regulatory crackdowns from authorities.
Xiaomi plans on issuing bonds worth $800 million in the year 2031 with a coupon of 2.875 each year. According to its regulatory filing, the company says that the proceeds will be used for “general corporate purposes”. The company will also issue what it called “green bonds” worth $400 million with a 4.1 percent coupon for every year. These bonds are issued to support environmental projects. The proceeds will be used to fund eligible projects under itsenvironmental scheme called “Green Finance Framework, Xiaomi said.
Xiaomi is well known for making smartphonesand consumer electronics. The company has been able to consolidate its position as one of the top brands in the world. The company has huge expansion plans and is eyeing the electric vehicle space. In March of this year, the company mentioned that it would launch its own electric car business and invest the sum of $10 billion for the next ten years. The money that Xiaomi plans to raise through debt issuance could be used in setting up its electric vehicle business.
For some time now, Chinese authorities have been carrying out crackdown actions against big tech companies. Xiaomi has not been left out of these crackdown actions. The Chinese Government has over the years introduced laws (relating to antitrust and data protection) that put big tech companies in a tight spot.
Cab-hailing service Didi is the most recent company to be faced by Chinese regulators. Chinese authorities recently demanded that the Didi mobile app be taken down from all Chinese stores.
With the funds it plans to raise, Xiaomi could do quite a lot. The company continues to be one of the top global brands providing smartphones and consumer electronics that are used globally.
