Advertisement
Advertisement

R&F wins approval for 6b yuan bond issue

Guangzhou R&F Properties, the largest developer in Guangdong province, has received approval to raise up to 6 billion yuan (HK$6.81 billion) by issuing bonds.

Adrian Chan Chi-hoo, an assistant to R&F chairman Li Sze Lim, said the company would sell the bonds by the end of September and use the funds raised to repay some of its bank loans and supplement working capital.

The company first proposed issuing domestic corporate bonds in November last year and received approval from its shareholders a month later.

According to the plan, the bonds will have a five to 10-year maturity and be listed on the mainland stock exchange.

Last month, Beijing-based Sino-Ocean Land Holdings was given approval to raise 2.6 billion yuan from corporate bonds on the mainland.

Meanwhile, Mr Chan said R&F was still waiting for government approval to sell 450 million A shares on the Shanghai Stock Exchange.

The developer submitted the application in April 2007.

John So, an analyst at ICBC International Research, said the developer could save interest expenditure from the bond issue.

'The interest rates of the existing bank loans are about 6 to 7 per cent, but that might be reduced to about 5 per cent by the issue of bonds,' he said, adding that the developer would also benefit from converting short-term loans into long-term loans.

R&F achieved 58 per cent of its full-year contracted sales target of 22 billion yuan by the end of last month.

Its shares fell 5.45 per cent yesterday to close at HK$17.

Post