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Huawei Technologies, the country's leading telecom equipment provider, signed agreements with Algerian Telecom, China Exports & Credit Insurance Corporation (Sinosure) and BNP Paribas yesterday in Beijing to fuel its overseas market development.
Under the agreements, Huawei is to supply, install and operate the CDMA-WLL (wireless local loop) system with a capacity of 80,000 lines for Algeria's Annaba region.
The project, with a total sum of about US$28 million, will be facilitated by the BNP Paribas Bank in financing terms and supported by Sinosure on the insurance front.
Algerian Telecommunications and BNP Paribas also signed a credit agreement through which the latter has extended to the former a buyer's credit facility for the maximum amount of US$28 million.
"We are happy to wrap up cooperation with all the participants as Sinosure is aiming to help domestic firms enter the overseas market," said Wang Zheng, deputy general manager of Sinosure's Medium and Long Term Underwriting Department.
Sinosure has so far underwritten Huawei's projects for about US$100 million and has supported Huawei's move into international markets, in Russia, Algeria, Ecuador, Brazil and Nigeria.
"Also, the signing ceremony indicates that foreign banks have begun to use their own funds independently and completely to provide a whole range of financial services for export credit dedicated to Chinese enterprises," she said.
BNP Paribas Beijing is currently following up a substantial backlog of projects in Beijing and hoping to reach more deals, said Pierre Joseph Costa, a representative of the company.
Analysts believe the transaction, the first export buyer credit wholly arranged by an international bank, sets a positive precedent for the country's future export financing projects.
"We are looking forward to more cooperation with BNP Paribas in export finance," said Tian Feng, director of Huawei's International Finance and Economics Department.
Huawei has, to date, carried out more than 10 overseas projects by using export credit insurance amounting to more than US$200 million.
Huawei exports equipment to countries in Latin America, Eastern Europe and Africa.
Sticking to its international strategies, Huawei has spared no efforts in expanding overseas.
The company has set up subsidiaries in more than 50 countries and regions including Germany, France, England, Spain, Portugal, Brazil, Russia and Thailand.
Turnover of its exports reached US$1.05 billion last year.
In the first seven months of this year, the turnover aggregated to US$1.1 billion, registering an increase of 150 percent compared to the same period last year.
"We expect the turnover to reach US$2 billion for the year," Tian said.
In another development, Huawei Technologies is currently engaged in restructuring in an effort to pave the way for its listing plans.
"Restructuring is what we are undertaking right at the moment," said Huawei Technologies spokesman Fu Jun.
Sources close to the company said it is going to be divided into eight sectors focusing on different areas, including technology, mobile telecommunication business, software, investment, training, service and logistics.
Analysts believe that although the restructuring may not be directly linked to Huawei Technologies' listing plans, it will certainly accelerate its initial public offering (IPO) process.
(China Daily September 24, 2004)
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