China’s highway company Zhejiang Communications Investment Group is aiming to tap the market for one-year bonds during a time of tough credit conditions and cash shortages that are plaguing the nation’s infrastructure companies.
The state-owned company plans to issue Rmb1.5 billion (US$236.2 million) one-year bonds on November 23, according to Xinhua news.
Zhejiang Communication’s core business is Investment in construction and operation of highways. Its roads connect cities within China, including Hangzhou with Ningbo and Shanghai.
The company predicts that it will have a Rmb398 million funding shortage to meet its expected operating expenses of Rmb1.95 billion this year. To help fill this it plans to allocate 25% of the bond proceeds to operating expenses for its expressways. The remaining will be used to pay off debt.
As of June 30, Zhejiang Communications had Rmb11.18 billion of short-term debt and Rmb55.85 billion of long-term debt.