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Air China to issue 2 bln yuan in debt for working capital

1-Jun-2005

BEIJING (XFNews) - Air China Ltd (HK 0753), the country's

largest international carrier, said it is planning to issue two bln yuan

in short-term det on the mainland's interbank debt market before the end

of this month in order to support its daily operations.

"Preparations have been completed. We will issue the debt soon, very likely before the end of this month," Rao Xiyu, secretary of Air China's board of directors, told XFN-Asia.

"The proceeds will be spent on the company's day-to-day operations," Rao added.

Air China will be among China's first companies to raise capital on the interbank debt market after the central bank yesterday said domestic companies "with good financial records" can issue notes with a maturity of up to 365 days.

The regulation became effective immediately.

Reviewing applications will take no longer than 20 work days, the central bank said.

"The new rule will not only help domestic companies to effectively broaden their fund-raising methods but also encourage exterior administrations from institutional investors," said an official from the bank in a statement.

Six companies, including Air China, filed their applications immediately after the new rule was launched, Xinhua news agency reported.

Air China said the Bank of China will be the lead underwriter of the issue.

The company, which lost a bid for the 65 pct state-owned stake in Shenzhen Airlines earlier this week, posted a 2004 net profit of 2.39 bln yuan, up from 160 mln in 2003.


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