Shenghong Refining and Chemicals signs a 41.5 billion yuan syndicated loan
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On the morning of August 12, the signing ceremony for the syndicated loan for Shenghong Refining & Chemicals (Lianyungang) Co., Ltd.’s integrated refining and chemical project was held in Nanjing. This is the largest syndicated loan project in Jiangsu in recent years. Leaders at all levels of the Jiangsu Province and Lianyungang City committees, as well as representatives from 10 banks including the Industrial and Commercial Bank of China’s Jiangsu branch, the **Development Bank, and the Export-Import Bank, were present to witness the signing.
The total investment in the Shenghong refining and chemical integration project amounts to 67.7 billion yuan. It involves the construction in the Xuwei New Area of Lianyungang of a refining and chemical complex with a capacity of 16 million tons, covering oil refining, aromatics production, and chemical manufacturing. This is the largest private manufacturing project in Jiangsu Province’s history in terms of investment amount. Upon completion, the project is expected to generate an annual output value of over 90 billion yuan and profits and taxes of over 20 billion yuan. It has been included by the State Council in the \"Petroleum and Chemical Industry Planning Scheme\"; it is one of the nine key projects that receive priority support, as well as one of the three private refining and chemical projects. It plays a significant role in promoting the transformation and upgrading of the petroleum and chemical industry, optimizing the supply-side structure, and achieving high-quality development of this industry.
Recent progress of the project: At 9:58 a.m. on May 10, upon the command of the on-site chief commander, the lifting of the first large-scale equipment for the Shenghong refining and chemical integration project got underway. In the 16 million tons per year atmospheric and vacuum distillation unit, the 330-ton heavy three-stage electrodialysis tank was steadily lifted by a 1350-ton crawler crane. Under the direction of the crane operators, it was raised above the foundation of the equipment, and with the precise handling of the technical staff, it was slowly placed in position – the lifting was successful on the first attempt! On April 2, construction began on the production office building for the Shenghong refining and chemical integration project ； The paraffin oil hydrogenation unit was put into operation. On April 15, the 4*150,000 tons/year sulfur recovery units of the Shenghong refining and chemical integration project were put into operation. On April 28, the ethylene glycol, butadiene, and vinyl acetate units of the Shenghong refining and chemical integration project began operations.
Loans account for 60 percent of the investment; the remaining portion must be funded through own resources
The Current Development Status and Trends of China’s Syndicated Loan Market (I) Overall Scale In recent years, the scale of syndicated loans in China has expanded rapidly. According to the \"Report on the Development of Syndicated Loan Industry\" released by the China Banking Association in December 2019, as of the end of 2018, the balance of syndicated loans was 7.39 trillion yuan, representing a year-on-year increase of 15.43%; this figure represented 3.6 times the level in 2012. Syndicated loans accounted for 11.07% of total corporate loans, and their non-performing loan ratio was much lower than the average non-performing loan ratio of banks. (II) Key Market Participants As of the end of 2018, policy banks and large commercial banks continued to play a leading role; they accounted for over 86% of the total amount in syndicated loans and were thus the main players in this market. The top five financial institutions were the China Development Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, Bank of China, and China Construction Bank. (III) In terms of regional distribution, syndicated loans are primarily concentrated in the economically developed Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin regions. The Yangtze River Delta region continues to hold a leading position, with Shanghai, Jiangsu, and Zhejiang accounting for 32% of the total value of newly signed syndicated loan contracts in 2018. In terms of the distribution by industry sector, projects in the transportation, warehousing, and postal services sector accounted for 44%, real estate projects accounted for 21% (of which shelter improvement and affordable housing projects made up 43%), and manufacturing projects accounted for 17%. These three sectors are the main areas targeted by syndicated loans, accounting for 82% of the total value of newly issued syndicated loans. (IV) The non-performing loan ratio remains at a low level, well below the average rate for banks. At the end of 2018, the average non-performing loan ratio for syndicated loans was 0.49%; although this figure increased by 0.06 percentage points compared to the end of the previous year, it was still far below the average rate for banks, and the increase was also much lower than the average growth rate of non-performing loans. It can be seen that syndicated loans have advantages in dispersing credit risks and enhancing risk management capabilities.