China Overseas Land & Investment

China Overseas eyes infrastructure deals

PUBLISHED : Thursday, 17 July, 1997, 12:00am
UPDATED : Thursday, 17 July, 1997, 12:00am

China Overseas Land and Investment is negotiating to acquire several toll roads and bridges on the mainland, its chairman says.

Sun Wenjie said the projects would cost 'tens of billions of yuan', but insisted the company's gearing would remain 'fairly low'.

'I think the company still has lots of room to raise funds through the market, and we will consider doing so when we find good investments,' he said.

The construction and property player began investing in the mainland's infrastructure sector last year, and recently spent US$60 million on five waterworks in Guangxi province, the contracts for which would be signed soon, he said.

China Overseas was seeking new sectors in which to invest in order to diversify its profit base.

Mr Sun said he expected returns from property development would slow in the next few years as measures adopted by the SAR Government to cool the property market took effect.

'Infrastructure investments can generate a very steady return, but the average yield is usually below 20 per cent,' he said.

'We are looking for certain new investments which can generate higher profits.' The firm's shares fell five cents yesterday to $5.85.