Chinese car rental company eHi Car Services Ltd. is in talks to raise onshore and offshore loans with proceeds planned to help repay its outstanding $381.5 million 7.75% due Nov. 14 notes, according to three sources familiar with the matter.
The company aims to raise about CNY 1 billion ($138.9 million) from onshore syndicated loans while also negotiating for an offshore private loan with the size between $100 million to $150 million, sources said, adding that the company planned to use proceeds from the loans to deal with the upcoming offshore maturity. eHi expects to close the onshore loan by the end of March, according to two of the sources.
Meanwhile, eHi is also preparing backup plans for the November notes’ repayment such as using money generated from sale of cars or raising financing by pledging service stores, sources said.
In January, eHi’s subsidiary Shanghai eHi Auto Services Ltd.
entered into a new finance lease agreement with China Development Bank Financial Leasing, pursuant to which the latter intended to purchase vehicles from Shanghai eHi at a total consideration of up to CNY 1.5 billion, and agreed to rent the vehicles to Shanghai eHi for no more than 36 months, with the lease principal totalling CNY 1.5 billion and total lease interest at around CNY 189 million. The lease principal and interest shall be paid on a monthly basis in installments, the announcement states. eHi intends to use proceeds of the facility to finance its operations of the vehicles, one of the sources said.
In other financing efforts, eHi is contemplating a U.S. initial public offering that could raise around $300 million, according to two of the sources. The Chinese company was first listed on the New York Stock Exchange in 2014 before it was
taken private in 2019.
Ehi did not respond to requests for comment.