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Maike Metals International Ltd., one of China’s top copper traders, said it has secured backing from domestic banks as it seeks to weather liquidity issues.
Lenders have agreed to provide credit support to Maike, including extensions on existing loans, the company said in a statement on Thursday. The assistance follows a meeting on Sunday hosted by the municipal government of Xi’an in the province of Shaanxi, where the company is based, it said.
The banks’ backing has given Maike breathing room, but the company is also applying for funds from the government to ensure it can keep operating, it said. The firm has been forced to delay some payments for imported copper, which the founder and chairman He Jinbi has blamed on the impact of Covid-19 flareups in China.
China is the world’s biggest importer of metals and Maike typically handle a quarter or more of its copper purchases. The firm has also invested in property, including hotels, office buildings and industrial parks in Xi’an.
Creditors are checking Maike’s assets, including its property holdings and copper inventories, as they scrutinize the company’s ability to repay its debts, according to people familiar with the matter. Its lenders include Industrial & Commercial Bank of China Ltd., the people said, declining to be identified as the information is private. ICBC didn’t respond to a request for comment.
Maike’s financial stress is the latest sign of how a sagging economy is squeezing China’s private sector. It comes amid growing caution over commodities financing in the wake of high-profile losses that have rocked the markets for metals such as nickel and aluminum, and huge price volatility fueled by Russia’s invasion of Ukraine.
(With assistance from Heng Xie)
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