First Issuer of Convertible Bond Listed in Shanghai

Nanning Chemical Industry Holding Corporation, the first company to issue convertible corporate bonds in China, is listed in Shanghai Securities Exchange today with its 40 million shares to be traded. Nanning Chemical is a large-sized SOE among the top 100 chemical industry enterprises and an important production base for basic chemical material.

On August 3, 1998, Nanning Chemicals issued for the first time its convertible corporate bonds to the public in China with a financing scale of 0.15 billion yuan and a duration of 5 years. The funds raised was mainly used for a technological upgrading project with an annual output of 80 thousand tons of caustic soda, an extension project with an annual output of 10 thousand tons of chlorine and a technical transformation project with an annual output of 2 thousand tons of AC foaming agent as well as paying back some long-term debts to adjust financial structure.

Last June, Nanning Chemicals was approved to issue 40 million shares of RMB ordinary stocks to the public. The actual funds raised from listing is 0.186 billion yuan, which will be used mainly in the fields of technical transformation on refined chemicals and biological engineering.

From the very date of listing to the expiry date of conversion, i.e. Aug. 2, 2003, the owners of convertible bonds can apply to convert all or part of the value in his or her account into the shares of Nanning Chemical Holding Corp. The conversion price is a discount of the issuing price. When the company is going to give out dividend, increase new shares or allocate shares, conversion price will be adjusted. The convertible bonds are also attached with compulsory conversion stipulation and the conversion is subject to no service fees and commissions.

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