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China Daily Website

Coca-Cola completes cross-border lending in yuan

Updated: 2013-09-03 08:40

Coca-Cola Beverages (Shanghai) Ltd has completed a 250 million yuan ($40.85 million) inter-company loan to London-based Atlantic Industries, a Coca-Cola subsidiary, with the help of Citibank China.

The loan makes Coca-Cola one of the first multinational companies in China to benefit from a new regulation by the People’s Bank of China allowing internal, cross-border lending by multinationals based in China.

The Chinese central bank issued a circular last month about simplifying the cross-border renminbi business process. It for the first time in writing allows China-based multinationals to make inter-company loans to their operations globally. It has been welcomed by multinational firms, as it increases the flexibility of their corporate treasury management.

The transaction also marks the first renminbi cross-border lending operation for Citibank China after the recent regulatory release, prior to which onshore banks had to seek approval from the central bank for renminbi denominated loan quotas on behalf of their clients, a process that usually takes around two months.

With the new regulation, Citibank China can directly process renminbi cross-border lending for their corporate clients after examining their clients' applications, which significantly simplifies the process and reduces the time to less than 10 working days.

David G. Brooks, chairman of Coca-Cola Greater China and Korea, said: "We are delighted to see this transaction come through. By making our treasury management more effective in a global context, this new policy is an important business development enabler for Coca-Cola globally. Also, very importantly, it represents an important step by the Chinese government in realizing its goal of the internalization of Renminbi. We highly applaud this new policy, and are very glad to have been an early participant and beneficiary of it."