China Oilfield Services Limited (COSL), the largest oilfield service provider
in Asia, has issued corporate bonds valued at 1.5 billion yuan ahead of an
expected listing on the mainland stock market.
It is the first time COSL, and its parent company, China National Offshore
Oil Corporation (CNOOC), the country's largest offshore oil producer, has issued
corporate bonds on the mainland market.
The 15-year bonds have an interest rate of 4.48 percent and have been
classified as "AAA", the highest rating, by the Dagong Global Credit Rating.
They were issued four days before the central bank announced a rise in interest
rates and took four days to sell out.
Zhong Hua, executive vice president and CFO, said the bond issue was "the
first step and a small step" taken by the company to enter the mainland capital
The company's debt to equity ratio surged from 5.2 percent in 2005 to 23.2
percent last year, but Wu Yanyan, a spokeswoman of the COSL Beijing Branch, said
the percentage still had room to grow as it remained low compared with companies
of a similar scale.
She attributed the rapid ratio hike to the company's fast business expansion.
The newly-raised funds will be used to erect or upgrade oil rigs, purchase
ships for offshore oilfields and build a multi-functional drilling platform to
help raise the oil output of the parent company and make COSL more competitive
in the global arena, said a COSL statement.
COSL reportedly plans to return to the mainland stock market by issuing 820
million shares on the yuan-denominated Shanghai A-share market. But price
details and a timeframe are yet to be released.
The other two Hong Kong-listed subsidiaries of CNOOC, CNOOC Limited and the
Offshore Oil Engineering Co. Ltd, are also preparing for a listing on mainland
stock markets, according to CNOOC deputy general manager Luo Han.
CNOOC, the third big oil corporation and biggest offshore oil and gas
producer in China, chalked up 120.8 billion yuan in sales revenue and 48.1
billion yuan in profit last year. Its daily oil and gas output grew by 5.1
percent in the first quarter year-on-year to 473,280 barrels of oil equivalent.
COSL reported a 32.9-percent rise in revenue from 2005's 4,789 million yuan
to last year's 6,365 million yuan. Its market value surged by 74 percent from
12.4 billion HK dollars in 2005 to last year's 21.6 billion HK dollars.
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