Baoshan Iron & Steel Co Ltd 600019.SS, China’s top listed steel producer, said it would issue bonds worth up to 3 billion yuan ($430 million), partly to boost working capital amid the coronavirus outbreak.
The bonds, with maturity of three years, will be the first tranche of the company’s 20 billion yuan issuance plan from 2020 approved by the securities regulator in October.
The funds raised will also be used to repay debt, the company, also known as Baosteel, said in a filing to the Shanghai Stock Exchange.
Beijing has beefed up financial support to prop up businesses, allowing debt financing and debt issuance by companies heavily affected by a fast-spreading coronavirus.
The coronavirus outbreak, which has killed more than 2,900 in China and has rapidly spread across the globe, pushed steel products stockpiles in the country to a record high and threatened steelmakers’ cash liquidity.
The most actively traded construction steel rebar contract on the Shanghai Futures Exchange SRBcv1 had dropped more than 5% since Jan. 20.
An official from China Baowu Steel Group, the parent company of Baosteel, said last month the latter’s orders in March fell by around 5%. He also expected the whole group’s first-quarter profit to reduce by 2 billion yuan to 3 billion yuan hit by the epidemic.
Source: Reuters (Reporting by Min Zhang and Shivani Singh; Editing by Maju Samuel)