Jianghuai Auto to issue $232 mln bonds to fund expansion

JIANGHUAI Automobile Co Ltd said yesterday it plans to issue 1.6 billion yuan (US$232 million) worth of convertible bonds to fund expansion.

The Anhui Province-based Jianghuai will sell the six-year bonds along with detachable warrants to A-share investors, according to its filing to the Shanghai Stock Exchange yesterday.

The capital will be used for six automotive projects including developing new models and expanding production of core car components, totalling 3.02 billion yuan.

Jianghuai plans to make an extra 100,000 A-class sedans and 60,000 multi-purpose vehicles every year. It will also add annual capacity of 100,000 automatic gearboxes and 260,000 transmissions.

According to its 11th Five-Year Plan, the nation's second-largest light commercial vehicle maker will expand into the car market, to increase profits and become a leading player in China's own-brand models.

Last year, Jianghuai's net profit dropped 14.45 percent to 330 million yuan despite a 32-percent gain in sales revenue to 14.2 billion yuan. It blamed the shortfall on rising material costs and heavy spending on restructuring.

Jianghuai launched its first sedan called the Bingyue in March this year, in addition to its Ruiying sports-utility vehicle, Refine multi-purpose vehicle and trucks.

Shares of Jianghuai rose 3.51 percent, or 0.2 yuan, to close at 5.9 yuan yesterday.