Utility Hong Kong and China Gas, with its 'Towngas' trademark, is keen on issuing more yuan bonds as it taps cost-effective funding for its planned HK$10 billion investment across the border in the next three years, a top official says.
Managing director Alfred Chan Wing-kin said low-interest-rate yuan-denominated bonds, dubbed 'dim sum' bonds, were gaining popularity on the back of a large pool of yuan deposits in Hong Kong and strong demand for yuan investment products.
He said the group would seek to sell more dim sum bonds 'soon' after becoming the city's first blue-chip company to issue this type of bond, raising 1 billion yuan (HK$1.2 billion) in April.
'The dim sum bond is an option to raise lower-interest-rate funds,' Chan said after the group's annual general meeting yesterday. 'This is despite the fact that we have HK$9.5 billion cash on hand.'
Towngas, a dominant gas utility which has supplied piped naphtha gas to customers in Hong Kong for nearly 150 years, has earmarked HK$10 billion over the next three years for acquiring projects on the mainland for growth, he said.
The group, which has chalked up a portfolio of 124 projects on the mainland spanning natural gas supply, new energy sources and water supply, was in talks to invest in about 30 projects at present, he said.
Of the potential investments, 15 projects were expected to be finalised this year, Chan said.