Proposal in Respect of Applying for a Continued Issue of Short Term
Shareholders and shareholder proxies:
On July 5, 2007, the Company successfully issued 500 million yuan short term financial bonds, which reduced financial expenses of 8 million yuan when compared with bank loans at the corresponding period, relieved the comparatively uptight capital situation of the Company and optimized its liability structure.
In order to explore new financing channel, improve the its self financing ability, relieve the comparatively uptight capital situation, optimize liability structure and reduce financial costs, the Company, conforming to the regulations of the Administrative Measures of Short Term Financial Bonds, is to apply for a continued issue of short term financial bonds.
The Company plans to apply for an issue of 365 day short term financial bonds, amounting to RMB 600 million. The way of issue will be a stand-by underwriting by a main underwriting agent, the main underwriting agent is China Merchants Bank. At present, the Company has signed Rating Entrustment Agreement with China ChengXin International Rating Ltd. (CCXI) and entrusted CCXI rating for the Company. The issuing work is planned to be finished by August 2008. It is estimated that comparing with the interest rate of bank loans, the integrative rate of short term financial bonds to be issued this time will decrease by 1 percentage point. After bonds issuing, the total amount of financial bonds and bank loans is controlled below the annual budget.
Please review the above proposal.
August 1, 2008