On December 30, 2014, CSSCE gained CSRC approval for issuing non-publicly no more than 300mln preferred shares. It thus became the first non-bank central enterprises with permission for issuing and floating preferred stocks, thanks to its market-oriented operation, good business performance and management and its firm grasp on opportunities. The follow-on issuances would be completed within 24 months upon CSRC approval.
When all tranches of shares have been issued, the sizes of CSSCE’s equity and working capital will increase by 16.8% and 15.4% respectively and its debt-to-asset ratio will drop by 2.6%. The coupon rate of 5.8% of the first-tranche 150mln preferred shares is the lowest amongst all available preferred shares in the market and lower than the current benchmark interest rate for 5-year above bank loans. By issuing the preferred stocks, CSSCE has effectively lowered its financial costs.
China International Capital Corporation Ltd. acted as sponsor and lead underwriter for the issuance, CITIC Securities Co., Ltd. as joint lead underwriter, PwC China as auditor and Dacheng as legal advisor for the issuer.
The Dacheng team was composed of attorneys Gao Xiang, Bi Lan, Zhao Liang, Wang Ding, Liu Xiaoyan, Wang Jirong, Chen Fenfen, partners Li Jieyu, Qu Xiangang, and senior partners Jian Ying and Yu Xugang.