China's top oil producer, PetroChina, said Wednesday it plans to issue no more than 60 billion yuan (8.6 billion U.S. dollars) of corporate bonds in the mainland market to ease funding pressures.
The total principal amount of the bonds was nearly half of PetroChina's net profit for 2007, which stood at 146 billion yuan.
The company board made the resolution Tuesday and will seek approval at an extraordinary general meeting of shareholders on July 31 before getting the nod from the China Securities Regulatory Commission, according to a statement on PetroChina's website.
The move was intended to "satisfy the operational needs of the company, further improve its debt structure, reduce financing costs and supplement working capital," said the statement.
"The company has a huge demand for funds," it said. "It has planned expensive projects for the 2006-2010 period, while soaring world crude prices cause sharply higher windfall taxes and the government keeps domestic refined oil prices much below international levels."
The proceeds from the bonds can also be invested in projects such as China's second west-east gas pipeline, said the company.
With a total investment of 142.2 billion yuan, the pipeline is expected to send natural gas from central Asia and western China to the country's southern and eastern economic hubs by 2011.
With durations of up to 15 years, the bonds will be issued in one or several tranches and may have the same or different maturities, said the company.
Source: Xinhua
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