Shanghai Hai Xing Shipping Co says it will know within two months whether attempts to refinance existing loans at lower rates will be successful. Chairman Li Shaode said the H-share company was counting on the implementation of rules governing the interest rate cut to be issued by the People's Bank of China next month to see if its interest burden could be trimmed. 'We will see how we can benefit from the rate cut only with the announcement of implementation rules,' he said. Lowering interest expenses is the top priority of Hai Xing, which was burdened by mounting debts with interest expenses rising 75 per cent to 271 million yuan (about HK$252.1 million) in the first half. Hai Xing has debts totalling 4.5 billion yuan, according to finance and accounting department vice-director Zhao Xiaoming . Last week, the People's Bank of China cut the lending rate on five-year fixed-asset investment from 15.12 per cent to 12.42 per cent. If a refinancing package could be sought, the 2.7 per cent drop could improve Hai Xing's bottom line because about 2.6 billion yuan of existing loans could benefit from the new rate. Hai Xing posted a net loss of 84.49 million yuan for the first half of the year, becoming the first H-share company to plunge into the red. It was hit by soaring interest expenses, higher depreciation costs, over-expansion and competition in the domestic shipping sector. The stock tumbled five per cent to close at HK$0.57 on the Hong Kong stock exchange yesterday. Mr Li said oil transportation would become the latest focus of the company in a bid to improve earnings, accompanied by dry cargo shipment. He said the company regretted the poor first-half performance, but said it would fare better in the second half. Mr Zhao expected depreciation charges - used to write off the value of fixed assets over time - to increase slightly in the second half, up from the 298 million yuan recorded in the first half.