Jiangxi Copper sets up Hong Kong financing subsidiary - spokesman
HONG KONG Aug 23 (Reuters) - Jiangxi Copper Co Ltd , the top producer of the metal in China, has set up a wholly owned subsidiary in Hong Kong to reduce financing costs for imports and potential acquisitions, company spokesman Pan Qifang said on Thursday.
Jiangxi Copper Hong Kong Co Ltd would finance the company's imports of copper concentrate, trade in metals and acquisitions of resources in the global market, Pan said.
"It is cheaper to borrow dollars in Hong Kong than in the mainland," he said, adding that the time needed for trade and project financing in Hong Kong was shorter.
Financial Controller Gan Chengjiu said in March that Jiangxi Copper planned to increase imports of copper concentrate this year by 13 percent to 1.02 million tonnes, from about 900,000 tonnes last year.
Jiangxi Copper previously processed the bulk of its copper concentrate financing via its headquarters in Guixi city in the southeastern province of Jiangxi and its metal trade through Jiangxi Copper International Trading Co Ltd set up last year in Shanghai, he said.
Companies in China typically require weeks to process dollar loans for imports as the yuan is not fully convertible and the government restricts currency outflows.
In Hong Kong, borrowing rates for the dollar are typically set between banks and borrowers. An executive at an international trading firm said local banks offered about 2-3 percent on copper trade financing for 1-2 months, with documentation including a bill of lading and warrant that confirms the location of the copper.
A senior executive at a large metals trading company in Shanghai said mainland banks offered about 3-4 percent above Libor for dollar loans. (Editing by Chris Lewis)
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