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SCMP Reporter

CHINA Overseas Holdings Ltd (COHL) has announced the issue of US$90 million worth of guaranteed secured floating-rate notes to exercise warrants on its listed subsidiary, China Overseas Land & Investment (COLI).

  The notes, maturing in 1998, will be listed in Luxembourg.

  Proceeds from the issue would be used to subscribe for more shares in the listed company held by COHL under a warrant scheme.

  The warrants are due to expire at the end of this month.

  COHL holds 75 per cent of COLI's outstanding shares, or about 492 million shares when all warrants are exercised.

   A total of 656 million warrants have been issued and the company's market capitalisation will increase by $840 million if all warrant holders exercise their subscription by the end of next month.

  COHL vice-chairman and president Sun Wenjie said his company was ready to exercise all COLI warrants and he estimated market capitalisation of COLI would increase by $800 million after the subscription.

  He said the subscription was to ensure that COHL's holding of COLI would not be diluted and COHL would continue to hold 75 per cent of the outstanding shares in COLI - the maximum allowed under stock exchange listing rules.

  Proceeds raised by the notes not used to exercise warrants would be used for general working capital, he said.

  The issue was lead-managed and underwritten by Peregrine Fixed Income, the fixed-income unit of Peregrine Investments Holdings formed in April last year.

  Other financial institutions involved at lead management level were Hana Bank, Korea Merchant Banking Corp, Overseas Union Bank and Westdeutsche Landesbank.

  The Agricultural Bank of China, Korea International Merchant Bank, Wing Lung Bank and Bank of Communications were involved at manager level.

 COHL, which is not listed in Hong Kong, is part of the China State Construction Engineering Corp, the mainland's biggest state-owned construction conglomerate under the control of the State Council.

  As of June 30, COLI had secured 260 construction projects in the past 15 years, with a total aggregate value of $28 billion, Mr Sun said.

   The company also invested in 78 property development projects, with an aggregate value of $36.5 billion.

  Annual profit growth stood at 30 per cent over the past 15 years.

   Total turnover, over the years, accumulated to $27.5 billion while accumulated net profit stood at $3.5 billion.

  For this year, Mr Sun estimated COLI would achieve a turnover of $3 billion from property sales if all 1.8 million square feet of its property due for release this year was sold.



COHL to issue US$90m floating-rate notes