As companies in China grapple with the economic impact of the coronavirus outbreak, the country’s largest online travel agency aims to gauge investor risk appetite.
According to a report from Bloomberg, Trip.com Group is seeking a $1.2 billion loan for refinancing and for working capital.
“Even something as frightening as the COVID-19 outbreak is short lived compared to the rise of China’s enormous middle class,” Chris Hemmeter, managing director for Thayer Ventures, says to PhocusWire.
“Trip is well positioned for the long-term and will likely ride China’s rise for decades to come.”
The Shanghai-based OTA is reportedly in talks with both international and Chinese lenders.
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“This situational financing need is an opportunity for investors and will likely prove profitable,” says Hemmeter.
And Trip.com Group is not the only Chinese company looking for a loan.
Reuters News says that more than 300 Chinese firms – including ride-hailing company DiDi Chuxing Technology – are seeking $8.2 billion in bank loans to diminish the impact of COVID-19.
Even before the coronavirus epidemic, Chinese companies were experiencing a major funding slowdown known as a “capital winter.”
Trip.com Group has been proactive since the coronavirus crisis began.
In January, the company launched a safeguard cancellation guarantee for customers who had to change travel plans due to the outbreak. Trip.com also waived transaction commissions and service fees for some businesses on its platform.