Hundreds of Chinese firms seek billions in loans amid coronavirus outbreak

More than 300 Chinese firms including Meituan Dianping, China's largest food delivery company, and smartphone maker Xiaomi Corp are seeking bank loans totalling at least 57.4 billion yuan ($8.2 billion) to soften the impact of the coronavirus, two banking sources said.

The firms, including China's dominant ride hailing service provider, Didi Chuxing Technology Co, Megvii Technology Inc and Qihoo 360 Technology Co, were either involved in the control of the epidemic or had been hardest hit, the sources told Reuters on Monday.

China is struggling to contain the epidemic, which has killed more than 900 people, the vast majority on the mainland, and infected more than 40,000. Authorities have cordoned off cities, suspended transport links and shuttered facilities where crowds gather, hammering economic growth which one senior economist said may slow to 5% or less in the first quarter.

Extended factory closures will slow manufacturing and weigh on global supply chains.

The companies seeking loans in the Chinese capital are likely to get fast-track approvals and preferential rates, said the sources, who received copies of two lists of company names sent to banks in Beijing by the city government's finance bureau.

There are no official data so far showing the total loans Chinese companies are seeking nationwide to weather the outbreak.

The two lists also contained the size of loans sought by the firms, which include pharmaceutical firms and restaurants. The bureau had earlier said firms seeking financial support could ask for its help.

"Banks will have the final say on lending decisions," one of the sources said. "The interest rates are likely to be on par with those offfered to banks' top clients. Xiaomi, the world's fourth-biggest smartphone maker, is seeking 5 billion yuan ($716.24 million) in loans to produce and sell medical equipment including masks and thermometers, according to the lists.

Meituan Dianping is seeking 4 billion yuan ($572.99 million), partly to help finance free food and delivery to medical staff in Wuhan, the epicentre of the outbreak in central Hubei province. Privately held Didi Chuxing, "severely impacted by the virus outbreak", is seeking 50 million yuan ($7.16 million).