Hong Kong broadband service provider HKBN Ltd is in talks with banks for a HK$4 billion ($510 million) refinancing loan, according to people familiar with the matter, as a proposed acquisition of the company gains momentum.

Proceeds from the new facility, which may carry a five-year tenor, will go toward refinancing a HK$5.5 billion loan due next March, said the people, asking not to be identified discussing private matters. Details of the deal are still under discussion and could change, the people added.

HKBN has also used some of the proceeds from a HK$6.75 billion facility marketed in January to help pay off the March loan, the people said.

HKBN did not immediately respond to a request for comment.

If successful, HKBN’s loan deal could help it bolster its finances as China Mobile Hong Kong Co closes in on a takeover of the firm. Hong Kong’s competition watchdog this month cleared the way for China Mobile Hong Kong’s buyout to proceed. That was after a rival bid from I Squared Capital hit a wall. 

READ MORE: HK watchdog accepts China Mobile’s HKBN acquisition commitments

HKBN’s finances have been steadying recently, swinging to a profit for the year ended August 2024. The company recorded net income of HK$108 million for the six months ended February on lower operating costs, according to its interim report. HKBN said results were also helped by decreased financing expenses as Hong Kong’s borrowing rates fell.