NORINCO provides $6.2 million supplier credit to Hwange Colliery Company for the acquisition of mining equipment (Linked to Project ID#72970)

In 2006, China North Industries Group Corporation Limited (NORINCO) — a Chinese state-owned enterprise — provided a $6.2 million supplier credit to Hwange Colliery Company for the acquisition of mining equipment (specifically, haulage trucks and earth moving equipment). The loan, which is captured via Project ID#62117, carried the following borrowing terms: an interest rate of LIBOR plus a 1% margin and a maturity of 2 years. It was payable in eight equal quarterly payments, starting on March 2007 and ending on December 31, 2008. NORINCO reportedly allowed the borrower to repay the loan through the sale of coal and coke to NORINCO, which in turn used the coal and coke to support its smelters in the Democratic Republic of the Congo. In November 2006, NORINCO announced that it had rescheduled the outstanding debt obligations of Hwange Colliery Company (worth $6.3 million) by providing a two year grace period. As of 2011, Hwange Colliery Company had still not fully repaid its debt to NORINCO. Project ID#72970 captures the rescheduling of the loan.

Additional details

1. AidData has estimated the all-in interest rate (6.277%) by adding 1% to average 6-month LIBOR in 2006 (5.277%).

Number of official sources

4

Number of total sources

11