Lancang Tea secures RMB47.15M loan agreements from Agricultural Bank of China

What's the deal? Pu'er Lancang Ancient TeaDealroom has a profile for this one. Try Dealroom → Co. (Stock Code: 6911) has signed two loan agreements totalling RMB47.15 million with Agricultural Bank of ChinaDealroom has a profile for this one. Try Dealroom → Limited. The funds will support the company's general working capital needs over a three-year term.

Loan Agreement I is secured by a portfolio of real estate assets, while Loan Agreement II is backed by the company's inventory of Pu'er tea. Both loans carry interest rates based on the Loan Prime Rate (LPR) with a fixed spread, payable monthly.

Why now? The Hong Kong-listed tea company appears to be shoring up its working capital ahead of what is typically a capital-intensive period for agricultural businesses. Securing predictable financing terms now locks in cost certainty amid a shifting rate environment in China.

What could go wrong? Using tea inventory as collateral is unusual and introduces commodity risk — if Pu'er tea prices drop, the collateral's value could fall below loan thresholds. A three-year debt commitment also adds leverage to a business exposed to agricultural cycles and consumer demand fluctuations.

The signal: Pu'er Lancang Ancient Tea is classified as a mature, vertically integrated producer on Dealroom, yet it is turning to structured bank debt — backed by real estate and tea inventory — rather than tapping equity markets for working capital. Agricultural Bank of China, one of China's "Big Four" state-owned lenders, acting here as a corporate investor of sorts, underscores how traditional state banking channels remain the financing backbone for established agricultural businesses even after a public listing.

Read more: Minichart