China Railway Construction raises equity to invest in PPP projects
China Railway Construction Corporation Ltd. (CRCC) has raised RMB9.9 billion (US$1.6 billion) through a private placement of A shares to invest in PPP projects.
CRCC, one of the largest integrated construction companies in China, focuses on railway, highway, and subway construction.
According to Moody's Investors Service, CRCC's completion of a non-public equity placement is credit positive, but has no immediate impact on its A3 issuer rating. Chenyi Lu, a Moody's Vice President and Senior Analyst, stated:
"CRCC's private equity placement is credit positive as the proceeds will alleviate debt funding needs to support its build-transfer (BT) and build-operate-transfer (BOT) operations. However, any impact on CRCC's financial leverage will be moderate, given the small size of the transaction relative to the company's total debt."
CRCC is 55.73%-owned by China Railway Construction Corp (CRCCG), a central state-owned firm. The company is under the supervision of the State Council of the People's Republic of China. Since February 2008, A shares and H shares of CRCC are listed on the Shanghai and Hong Kong stock exchanges.
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