Chemicals manufacturer Shandong Haihua Co Ltd said it would issue CNY 1 billion in five-year convertible bonds on 7 September 2004 to fund two soda ash production projects.
The net proceeds of CNY 96…
Chemicals manufacturer Shandong Haihua Co Ltd said it would issue CNY 1 billion in five-year convertible bonds on 7 September 2004 to fund two soda ash production projects. The net proceeds of CNY 965.4 million will be used to build a 600,000-ton a year soda ash production line and an alkaline waste treatment project in Weifang, eastern Shandong province, the company said in a statement to the Shenzhen Stock Exchange. Haihua“s largest shareholder, state-owned chemical manufacturer Shandong Haihua Group Inc, produces soda ash, unrefined salt and rubber products. The coupon rate for the bonds will be 1.5% in the first year, 1.8% in the second, 2.1% in the third, 2.4% in the fourth and 2.7% in the fifth year, Shandong Haihua said in its prospectus. The new soda ash plant will be the largest in the world, with an annual production capacity of 1.7 million tons, a company official said. Of the net proceeds, over CNY 730 million will be used to pay back short-term loans borrowed to complete the new production line in 2003, another company official was reported as saying. The remaining CNY 235 million will be invested in an alkaline waste treatment project, to produce 300,000 tons of calcium chloride a year. The National Development and Reform Commission approved the bond issue in early 2003, Jiang said. However, the outbreak of SARS forced the company to delay the issue and use bank loans instead, she added. In 2003, one-third of total company revenue of CNY 2.65 billion came from soda ash. Several other companies have announced plans to build new soda ash plants recently even as the Chinese government tries to limit the surge in fixed-asset investment. Zhejiang Glass Co Ltd will open a CNY 1.6 billion soda ash production facility in the northwestern province of Qinghai in the 2H of 2005 with annual production capacity of 900,000 tons. In May 2004, Belgium-based Solvay SA said it hoped to set up a soda ash joint-venture with Nanjing Chemical Industries, a subsidiary of China PetroChemical Corp (Sinopec Group), in 2005. Solvay SA“s soda ash plant in Bulgaria has an annual capacity of 1.2 million tons, currently the largest in the world. The company produces a total 5.4 million tons of soda ash a year at its eight plants in Europe. In 2003, China produced 11 million tons of soda ash, 1.26 million tons of which were exported to overseas markets, Haihua said in its prospectus, citing figures from China Soda Industry Association.