Yunnan Copper to sell bonds

PUBLISHED : Saturday, 13 October, 2007, 12:00am
UPDATED : Saturday, 13 October, 2007, 12:00am

Yunnan Copper Industry, the mainland's third-largest producer of the metal, plans to raise as much as 2.9 billion yuan in a bond sale to repay loans and for use as general working capital.

The Kunming-based company will seek shareholders' approval for the sale on October 29, according to a statement filed with the Shenzhen Stock Exchange.

The bonds would have a maturity of between five and 10 years and the date of sale would depend on market conditions, the statement said.

Yunnan Copper shares fell 2.5 per cent to close at 89.90 yuan yesterday.

Yunnan Copper and other listed mainland firms have been tapping the recently reformed corporate bond market for funds after banks were asked by the authorities to tighten lending.

In a major market overhaul, the China Securities Regulatory Commission took over some regulatory power from the National Development Reform Commission and scrapped stringent rules such as quotas and bank guarantees

In August, Shenzhen-listed Yunnan Copper reported a 58.4 per cent jump in first-half profit to 773.5 million yuan on turnover of 17.71 billion, thanks to soaring metals prices.

Its state-owned parent, Yunnan Copper Group, earlier reaffirmed that its plan to inject its copper mine assets into the listed arm was unchanged by the sale of a strategic stake to Chinalco.

Chinalco, the parent of Hong Kong and Shanghai-listed Aluminum Corp of China (Chalco), in August signed a letter of intent with the Yunnan government for a 49 per cent stake in Yunnan Copper Group.

Yunnan Copper Group aimed to triple its turnover to 100 billion yuan in five to seven years, from 32.69 billion yuan last year, chairman Zou Shaolu said in an interview with the China Securities Journal last month.

The stake sale to Chinalco would bring capital, copper resources and technology the firm needed for its copper-processing business, Mr Zou said.

Yunnan Copper Group, which owns 7.5 million tonnes of copper resources, will seek more mines as only 26 per cent of its refined copper is made from its own ore.