China State Shipbuilding is taking care of this problem by issuing bonds themselves.
China State Shipbuilding to issue $439m in bonds
By Sandra Tsui in Hong Kong - Tuesday 17 February 2009
CHINA State Shipbuilding Corporation plans to issue Yuan3bn ($439m) worth of five-year bonds this month.
The bonds, will each be worth Yuan100, and are intended to be sold on the interbank bond market from February 23.
CSSC, parent company of Shanghai-listed China CSSC Holdings Limited and Hong Kong-listed Guangzhou Shipyard International, said it would use two-thirds of the fund raised to finish new and unfinished newbuilding orders and complete core supporting projects. It will also spend Yuan500m on buying raw materials and equipment, as well as Yuan500m on repaying bank loans.
As one of the two largest shipbuilding companies in China, CSSC has gained a quota for the issuing of a total of Yuan9.6bn of mid-term notes this year.
It is common practice for large Chinese state-owned enterprises to raise funds at parent-company level and then cascade the funds to subsidiaries including some of their listed entities in order to save administration costs.
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