CHINA Southern Glass Holdings is to issue US$45 million of convertible bonds early next month after clearance from the China Securities Regulatory Commission. The Shenzhen B share counter will become the second mainland-issued company to tap the international capital market with a convertible bond issue after Shanghai's China Textile Machinery. The company was given state approval two years ago to raise up to $60 million with the bond issue. The company revived the fund-raising plan a few months ago in an attempt to fund its $130 million ultra-thin float glass plant. Deputy general manager Wang Chunsheng said: 'We proceeded with the plan in accordance with our needs and also the market situation.' The convertible bonds would mature in five years and bondholders would be allowed to convert them into B shares six months after the issue. Southern Glass plans to borrow $30 million in a syndication loan and 100 million yuan (about HK$93.13 million) from mainland banks. Mr Wang estimated that Southern Glass would pay $10 million a year towards servicing debt repayments and interest for the borrowings and bonds. This would affect the company's short-term earnings growth because the new plant would not be in operation until October next year. The plant would have an annual capacity of 100,000 tonnes, boosting the firm's total capacity to 170,000 tonnes in 1997, including float glass and processed glass products. Mr Wang said the company's earnings would be spectacular in 1997. This year, Southern Glass' planned production capacity was 60,000 tonnes of processed glass products.