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 | Thursday, April 27, 2000, updated at 16:09(GMT+8) | ||||||||||||
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Largest Debt-Equity Swap Agreement in Ningxia SignedThe Lingwu Bureau of Mines in northwest China's Ningxia Hui Autonomous Region signed an agreement on Tuesday with its creditor, Xinda Assets Management Company of China, to swap 1.034 billion yuan of debt for equities.This was the largest debt-equity swap ever signed in Ningxia, said a regional government official. The Lingwu Bureau of Mines is a large state-owned enterprise in Ningxia with total assets of 1.99 billion yuan, and the company had sales revenues of 299 million yuan last year. However, the mine has a high asset liability ratio as a result of overproduction and a slide in coal prices. In view of the fact that Lingwu has proven reserves of 27.3 billion tons of low-phosphate, low-sulfur, and high-energy coal, the local government has adopted a series of measures including closing small coal mines and offering preferential treatments to help the enterprise out of difficulties. This debt-equity swap helps Lingwu cut down its bank interest by 71 million yuan.
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