Friday, Feb 27, 2015Friday, Feb 27, 2015

Energy firm announces China's first-ever preferred share sale

Published on Apr 25, 2014 10:33 AM

SHANGHAI (Reuters) - Guanghui Energy Co has become the first Chinese listed firm to announce a plan to issue preferred shares, in a surprise to market watchers who expected banks would take the lead in testing out the new form of capital recently approved by regulators.

The Xinjiang-based private gas and coal mining firm aims to raise 5 billion yuan (S$1.6 billion) in a private placement, pending regulatory approval, the company said in an exchange filing.

The issue would mark China's first-ever sale of preferred shares, a form of hybrid capital instrument that combines features of debt and equity.

As part of a slew of reforms planned for China's capital markets, the State Council, the country's cabinet, gave the green light for preferred share issuance for the first time last November.

If you are not a subscriber, you can get instant, unlimited access here