BEIJING and HONG KONG, Nov. 4, 2013 /PRNewswire/ -- ChinaSoft International Limited ("ChinaSoft" or "the Company") (SEHK: 354), a leading IT solutions and outsourcing service provider in China, today announced that the Company has entered into an agreement with a group of institutional lenders, including Deutsche Bank AG and Mega International Commercial Bank Co., Ltd., for an aggregate amount up to US$100 million term loan facility (the "Syndicated Loan") for three years. The Syndicated Loan will bear interest at the rate of LIBOR + 2.95% per annum.
By securing this US$100 million financing, the Company will have obtained strategic expansion capital for M&A, especially in areas of next generation technology and cloud, as well as additional working capital for our existing business.
Seeking debt financing also highlights ChinaSoft management's consideration on capital structure, since debt is a less expensive source of capital compared to equity. With interest rate still at historical lows, the Company looks to exploit current rate environment to further its strategic goals.
ChinaSoft strongly believes that all over the world the IT services business model is changing due to the evolution of information technologies like cloud computing, social networking, mobile communications and big data analytics. As part of its growth strategy set in 2011, ChinaSoft embraced the Professional, Outsourcing and Emerging (POE) structure. The Company will pursue growth in its traditional IT professional consulting & solutions business (P) and outsourcing business (O) while pushing into innovative and emerging technologies (E) such as cloud computing and mobile communications. The Company believes that this transformation is in alignment with the strategies of its customers such as Alibaba, China Mobile, Huawei and Microsoft.
