Esprit Holdings (0330) said it has been granted a five- year loan facility of HK$2.6 billion from 13 lenders to finance the takeover of the brand's retail business in the mainland.
The interest rate is 0.65 percent per annum over the one, two, three or six-month Hong Kong Interbank Offered Rate with an upfront fee of 0.45 percent.
"The response of the banks to the facility has been extremely positive, which demonstrates our strong reputation and the confidence of the banking industry in Esprit," chief financial officer Chew Fook-aun said.
The transaction is expected to complete "within the next couple of weeks."
The fashion retailer received a total commitment of HK$6.5 billion from banks, which was 2.5 times the original amount it was seeking.
Patrick Lau, senior vice president of group finance, said the remaining HK$1.28 billion needed to buy the stake it does not own in the joint venture will be financed by internal resources without raising further funds.
The company held net cash of HK$4.84 billion as of June 30. It announced in December that it would buy the remaining 51 percent stake in the joint venture from China Resources Enterprise (0291) for HK$3.88 billion. The joint venture operated 1,112 stores selling Esprit products - 345 self-operated and 767 franchised stores - in 171 mainland cities as of June 30.
Esprit shares closed 1.8 percent lower at HK$51.75 yesterday.
