Chinese Internet company Xunlei has formed a strategic partnership with China Construction Bank's Shenzhen branch to gain a CNY10 billion loan and a customized capital management program for Xunlei over the next three years.
Luo Lan, vice president of Xunlei, said that the cooperation aims to provide financial security for Xunlei's rapid expansion, enhance the company's ability to resist risks in the market, and improve its evaluation and investor confidence.
Under the agreement signed by the two parties, China Construction Bank will provide working capital loan support during Xunlei's IPO process. Meanwhile, China Construction Bank will design the best cash management program for Xunlei to ensure its financial security as well as timely transaction and payment schedule. In compliance with the relevant Chinese laws, regulations and financial policies, Xunlei will reportedly gain the the best rates from the bank.
Prior to this financing move, Zou Shenglong, chief executive officer of Xunlei, said during an interview that based on the current poor stock market conditions and the development of the company, Xunlei will consider re-launching its IPO plan in 2014.
Zou revealed that advertising was the major income source for Xunlei three years ago. However, at the beginning of 2013, about 60% to 70% of its revenue was payment from users, including membership fees and subscriptions to cloud products.