Shanghai: Shanghai-listed Lianyungang Port Company has announced that it plans to establish a financing arm, Lianyungang Port Group Finance Company, with its parent shareholder Lianyungang Port Group.
The company recently received approval from the local banking regulatory commission for the establishment of the financing company.
Lianyungang Port Company and its parent will invest RMB200m ($32.24m) and RMB300m ($48.36m) respectively for 40% and 60% equity shares in the new financing arm.
Lianyungang Port said it is expected to make investment of RMB7.4bn ($1.2bn) in total for various projects in the next three years and the current financing mode could no longer meet the increasing cash flow demand of the company. The establishment of a dedicated financing arm will enhance the risk controllability and lower annual financing interest by around RMB72m ($11.6m) for the company.
Lianyungang Port reported a net profit of RMB15.14m ($2.44m) for the first quarter of 2015, down 36.43% year-on-year.