ChemChina raises $20 billion for Syngenta deal

HONG KONG: ChemChina has raised $20 billion (15.4 billion pounds) in perpetual bonds and preferred shares to finance its acquisition of Swiss seeds maker Syngenta, according to a regulatory filing by the state-owned Chinese company.

ChemChina has restructured the financing of its Syngenta deal to take on more equity and reduce its short-term debt burden, but will still have nearly $20 billion in loans to refinance within 18 months, the filing shows.

Bank of China (BoC) has invested $10 billion via a perpetual bond, making the Chinese lender the single largest financier in the $44 billion deal, according to the May 18 filing which also shows state-owned asset manager China Reform Holdings Corp Ltd has provided $7 billion via a perpetual bond.

China’s Industrial Bank Co Ltd has invested $1 billion through the same means, while Morgan Stanley has provided $2 billion via convertible preferred shares.

The ambitious takeover is nearing the finish line after regulators last month granted the final approvals and as more than 80 per cent of Syngenta shareholders voted in favour.

The deal gives China a portfolio of top-tier chemicals and patentprotected seeds to improve agricultural output, but has also left ChemChina facing a hefty debt burden which it has been seeking to reduce by bringing in more equity investors and replacing short-term loans with longer-term debt.

ChemChina last year arranged $32.9 billion in bridge loans from more than 20 Chinese, European and Asian lenders, stoking concern among investors and analysts over its leverage. — Reuters