Shandong Chenming Paper and Hong Kong unit in fundraising plans
Parent firm and HK subsidiary agree to issue commercial paper and a bond
Shandong Chenming Paper Holdings and its wholly-owned Hong Kong subsidiary, Chenming (HK), plan to issue up to 13.8 billion yuan (HK$17.4 billion) of commercial paper and a US$500 million bond respectively, Chenming Paper said.
The Shenzhen and Hong Kong-listed firm's plan was approved by its board on Monday, but was subject to shareholders' approval at an extraordinary general meeting on December 16, it said in a stock exchange filing.
The paper producer will issue up to 13.8 billion yuan of super and short-term commercial paper publicly in the interbank market in China. Chenming (HK) will issue up to US$500 million of US dollar bonds to institutional and retail investors in the international market, with a maturity of up to 10 years. Proceeds from the issues will be used to replace corporate borrowings and replenish working capital.
Chenming Paper's board on Monday approved a plan to provide a total of 21.1 billion yuan of three-year credit guarantees for seven subsidiaries, including Chenming (HK), to apply for credit lines. Chenming (HK) has a gearing ratio of 93.84 per cent, while two other subsidiaries, Shandong Chenming Paper Sales and Shouguang Chenming Import and Export Trade, have gearing ratios of 97.94 per cent and 94.85 per cent, respectively.
Chenming (HK) planned to inject 3.07 billion yuan into Shandong Chenming Financial Leasing to increase the leasing unit's registered capital to 4.07 billion yuan, Chenming Paper said in the statement.
The capital injection would facilitate the unit's project and financial leasing business and boost Chenming Paper's profitability, the company said.
