H share eyes US$200m in overseas bond issue
Shenzhen Expressway plans to tap international capital markets for up to US$200 million in convertible bonds at a time when foreign banks are tightening up on lending to mainland enterprises.
The plan also comes despite Beijing's restrictions on debt issued by the state sector because they are considered the country's obligations.
Restrictions on foreign-currency debt issued overseas are even more stringent.
Executive director Tao Hong said yesterday the State Development Planning Commission had yet to give the H share an official response on the $150 million to $200 million bond issue.
Among H shares, only Zhenhai Refining and Chemical, Huaneng Power International and Qingling Motors have issued convertible bonds overseas.
Ms Tao was encouraged by the commission's approval of Sichuan Expressway for an issuing quota of $200 million in convertible bonds, underscoring Beijing's priority for the infrastructure sector. Proceeds from the bond issues would be used to fund a number of on-going and new toll-road investment projects over the next few years.
They include the acquisition of a 51 per cent stake in Hunan's Changsha Ring Road and a 23 per cent stake in the Western Corridor linking Shenzhen and Yuen Long in Hong Kong; as well as the development of Nanguang Expressway.
Ms Tao said the company would opt for domestic yuan financing such as a corporate bond issue or an A-share issue as fund-raising alternatives, in addition to bank loans to meet funding needs.
It hoped to raise between 500 million yuan (about HK$466.45 million) and one billion yuan from the proposed corporate bond issue, aiming to have a longer maturity of about eight years, she said.
The H share was sitting on more than 300 million yuan of cash and had credit lines from mainland state banks for up to three billion yuan, said Ms Tao.
Shenzhen Expressway chairman Chen Chao said the firm had appointed Deloitte Touche Tohmatsu to study strategic and development planning over the medium and long term.
