Anhuai Jianghuai Auto to issue 1.6 bln yuan of bonds

Anhuai Jianghuai Auto has announced that it is planning to issue around 1.6 billion yuan ($228.8 million) in bonds in order to fund its current expansion plans, reports AFX Asia.

A statement filed with the Shanghai Stock Exchange said that the bonds will be for a six-year period and will receive an unspecified number of call warrants for every bond taken up. It added that the coupon and the exercise price will be determined later. The issue is still the subject of approval by shareholders and the Chinese regulators. The company has also revealed that despite witnessing an increase in revenues of 31.7% to 14.27 billion yuan last year, net profits slipped by 13.5% to 328.5 million yuan.

Jianghuai Auto's financial results have been pressured by the rising cost of raw materials over the course of the past 12 months. The cash released by the bond issue will go some way towards helping it carry out its plans to build a new plant that will produce around 40,000 medium- and heavy-trucks annually. The rest of the funding will go towards bolstering its line-up with new and improved products.