MTRC in talks for working capital loans

Hong Kong’s MTR Corp (0066) is in discussions with banks for several bilateral loans as it continues to expand its railway network in the Asian financial hub, according to people familiar with the matter.

The rail-to-real estate operator has asked banks to commit around HK$1 billion each, with loan tenors of up to five years, said the people, who asked not to be identified discussing private matters. The total cumulative amount to be raised hasn’t been determined yet, the people said, adding that details could change as discussions are ongoing.

MTR “conducts forward-looking financial planning” to address funding needs that arise from business operations, said a company spokesperson, adding that bilateral loans have always served as a tool for its working capital management.

Substantial funds are required in the years ahead for MTR to maintain and invest in its rail infrastructure. The company is now focused on the next major phase of development, including the extension of the city’s Tung Chung and East Rail lines, among others, according to the company’s website.