Shareholders in Cosco Shipping Development Co (CSDC) will vote this month on a proposal to raise more cash through a bond issue.
The financial arm of the Chinese shipping giant revealed plans to raise up to CNY 8bn ($1.13bn) in March, but has tweaked the proposal several times since then.
The company said in a statement to the Hong Kong bourse on Tuesday that the amendment would allow it to seize the opportunity of the downward trend of Chinese renminbi mid- and long-term interest rates to strengthen debt structure.
Under the original proposal, the corporate bonds would have had a term of not more than 10 years. This has been revised to a term of up to 20 years.
“The specific terms of maturity and the issue size of each category shall be determined by the board (or persons authorised by the board) before the issuance based on the capital needs of the company and the prevailing market conditions at the time of issuance,” the company said
In addition, use of the proceeds has been revised to replenishing general capital, adjusting the debt structure of the company, repaying matured debts and settling instalments on purchased vessels.
Cosco Shipping and subsidiaries have embarked on a major fleet expansion and rejuvenation programme since CSDC announced its corporate bond proposal.
Two of the biggest fleet expansion deals emerged in August and September.
Affiliated Cosco Shipping Holdings announced in August that it was planning to spend about $2.15bn on a series of 12 methanol dual-fuel neo-panamax container ship newbuildings.
Less than a month later, Cosco Shipping revealed it had lined up a massive haul of 42 bulker newbuildings worth CNY 12.7bn ($1.8bn), most of them to be built at shipyards within the greater Cosco group.
CSDC’s Hainan arm is central to the bulker deals, as it will own the vessels and lease them to Cosco Shipping Bulk.
Shareholders will vote on the corporate bond issue proposal and the bulker deals at an extraordinary general meeting on 24 October.
