China Gas obtains US$75m loan
Mainland-based piped-gas supplier China Gas Holdings has pumped US$75 million into its war chest for acquisitions by obtaining a credit facility from the Asian Development Bank.
The facility, which was the second and final US$75 million loan the pair agreed to two years ago, matures in seven years and has an annual interest rate equivalent to 1.35 percentage points above the London interbank offered rate.
China Gas managing director Liu Minghui yesterday said the fresh funds would be earmarked for gas projects, to fund the group's plan to acquire seven to eight city distribution networks this year and to finance its estimated 1.2 billion to 1.5 billion yuan capital expenditure annually.
The group now had a portfolio of 63 networks in 56 cities, he said.
The loans added to a rash of equity and debt fund-raising exercises by China Gas in the past two years, with the biggest being a 20 billion yuan credit facility granted by policy lender China Development Bank last year.
The company still has not drawn on most of the money it raised both in yuan and US dollars, but Mr Liu said: 'We are not raising funds for the sake of raising funds.'
He said the group's debt ratio, which rose to 56 per cent after the latest loans from 46 per cent, remained at an 'acceptable' level.
Asian Development Bank said it expected to turn the tap on funding the mainland's gas sector to improve air quality.
The China Gas loans marked the Third World country lender's first in the natural gas distribution network in the mainland.