In a groundbreaking move, the first cross-border loan for merger and acquisition (M&A) purposes through the free trade non-resident (FTN) account has been completed in the Lin-gang Special Area, Shanghai, thanks to a new policy that has allowed Lin-gang to relax restrictions on non-resident loans.

The Shanghai branch of Shanghai Pudong Development Bank provided a loan of 148 million yuan ($20.3 million) to a technology company's overseas subsidiary for the acquisition of a foreign sensor business, aiding the enterprise in efficiently completing its overseas acquisition endeavors.

In September 2024, the Shanghai Bureau of the National Administration of Financial Regulation issued a pilot work plan for prudently relaxing restrictions on non-resident M&A loans in Lin-gang Special Area.

The Dishui Lake Financial Bay. [Photo/WeChat ID: shlgguanweihui]

Leveraging this new policy, the Shanghai branch of Shanghai Pudong Development Bank devised a M&A loan scheme for the company with its overseas subsidiary as the borrower, with a financing ratio of 80 percent and a tenure of 10 years, better catering to the company's cross-border acquisition needs. The loan disbursement was completed within two working days of finalizing the transaction price.

The company expressed satisfaction with the new M&A loan policies introduced in Lin-gang Special Area, highlighting the area's high-level openness.