Chinese phone maker Xiaomi said on Friday that it has raised $1 billion in debt to fuel international expansion and create a retail presence as it looks to strengthen its hold in emerging markets, especially India.
The debt is structured over three years, the company said in a statement.
The syndicated loan agreement was signed between Xiaomi H.K. Ltd, the company’s wholly-owned subsidiary in Hong Kong, and a collective of 18 lenders in Europe, Middle East, India, China, Hong Kong and Taiwan, the company said.
Deutsche Bank and Morgan Stanley served as joint coordinators for the loan, while Bank of China Hong Kong Ltd, Deutsche Bank AG and Wing Lung Bank Ltd acted as lead arrangers and book-runners.
Xiaomi had previously secured a three-year term loan of $1 billion in 2014.
“The global syndicate of top-tier banks is a strong endorsement of Xiaomi by the international capital markets," Shou Zi Chew, CFO at Xiaomi, said. The strategy to create an offline retail presence marks a departure from Xiaomi’s popular online flash-sales model which—by creating a strong “pull"—catapulted the smartphone brand to the second spot in India, in terms of units sold. Flash sales refer to a short period when a product or products are sold for heavy discounts.
According to IDC’s quarterly mobile phone tracker report, Xiaomi’s market share in India rose to 14.2% in the January-March quarter—second only to Samsung which has a 28.1% share—as it fended off aggressive Chinese competitors Oppo and Vivo and the home-grown Micromax.