A RECORD quarterly loss for Shenzhen-listed Zoomlion Heavy Industry Science and Technology Co. has raised questions over the indebted company’s ability to finance its US$3.4 billion bid for U.S. crane maker Terex Corp.

    Zoomlion posted Friday a net loss of 660.3 million yuan (US$101.50 million) for the January-March quarter, compared with a year-ago loss of 383.4 million for that period. The number is at the upper end of the 600 million-680 million yuan loss range the company had warned about earlier this month.

    Domestic heavy equipment makers are battling an historic glut of unsold equipment, unused factories and tumbling earnings following a massive construction boom initiated by a US$644 billion government stimulus package announced in 2008.

    The grim earnings for Zoomlion, which confirmed its offer for Terex in February, come as U.S. companies have grown more skeptical of Chinese companies’ ability to complete deals. Zoomlion had debt of 53.1 billion yuan as of end-2015.

    “It’s possible that the results will affect the Terex deal,” said Xu Mingle, an analyst at BOC International.

    Earlier this month, Zoomlion sought to provide assurances to Terex over its offer, people familiar with the matter said, saying it would cover the risk of the acquisition being approved by the Chinese authorities.

    John Hu, an analyst with Morningstar, said: “I think Zoomlion’s management should reconsider the Terex deal as its first quarter earnings hit a record low. Is it worth spending so much money on Terex?”

    Zoomlion declined to comment when asked if the latest earnings would impact its bid for Terex.

    For Zoomlion, founded in 1992 by researcher-turned entrepreneur Zhan Chunxin and seven other partners, a deal with Terex would give immediate access to the North America market, which is holding up better than the company’s home market. (SD-Agencies)