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Facing a cash crunch due to the civil war in the country, two Libyan banks have submitted applications to Chinese lenders for an extension of their letters of guarantee.
China’s Ministry of Commerce (MOC) said that Libya’s Sahara Bank and Gumhouria Bank have asked three Chinese lenders, including Bank of China and China Construction Bank, to extend 11 letters of guarantee.
The request came as the ongoing turmoil in Libya disrupted production and business activities, the Ministry said in a statement.
The 11 letters of guarantee involved $497 million and seven Chinese companies. Most would mature in April, May, July or August this year.
The Ministry said that it would work with the state-owned Assets Supervision and Administration Commission, the China Banking Regulatory Commission and the Supreme People’s Court to help affected banks and companies to “properly” respond to Libya’s request.
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