China’s LED chip manufacturer HC Semitek Corp. Suzhou branch has received a US$ 150 million loan to be paid back in six years for its LED business, according to a Chinese-language Reuters report.

China Development Bank’s Suzhou Branch was the leading bank by issuing a US$ 140 million loan to the LED company, while Bank of Communications Suzhou Branch provided the remaining US$ 10 million. According to sources, net proceeds from the loan will range between 300 to 400 basis points (0.3%-0.4%). After a two year grace period, the amortized loan will be repaid on a six month basis.

HC Semitek parent company listed in Shenzhen has guaranteed the loan and has used its factory and equipment as guaranty. According to an announcement made earlier by HC Semitek, the Suzhou branch situated in Zhangjiagang City in Suzhou Province was established in Aug. 2012, with investments totaling RMB 181 million (US$ 29.58 million). 

HC Semitek was formerly known as Wuhan HC SemiTek Co., a leading domestic LED chip supplier. Revenues slid 40% in 1H13 to RMB 111.8 million compared to 1H12, while net profit dropped 62% in the same period to RMB 14.29 million.