CSSC Taps ‘Virus Bonds’ to Raise USD 717 Mln
Chinese shipbuilding giant China State Shipbuilding Corp. has raised CNY 5 billion (USD 717 million) from domestic investors intended for curbing the impact of the coronavirus outbreak.
For this purpose, the company sold the so-called “virus prevention and control bonds” also referred to as the”virus bonds”, which require a much faster approval process than regular bonds.
The shipbuilding major said that the funds would be used to finance production work and purchase of materials by its member units, which participated in the construction of hospitals in Wuhan for infected patients.
The bonds will also provide the necessary liquidity for the company’s shipbuilding arms as they ready to resume production activities.
Based on the latest updates from the World Health Organization (WHO), China is starting to lift the precautionary measures aimed at curbing the spread of the virus, and manufacturing activities are starting to pick up.
CSSC joins other Chinese companies in tapping ‘virus bonds’, such as China Merchants Ports which raised USD 100 million to repay debts and contain impact from the outbreak. China Cosco Shipping Corp collected USD 143.5 million from the bonds.
The Chinese shipbuilding heavyweight said it was working on resuming production activities and communicating with its individual yards to conduct workplace inspections and remove potential obstacles related to supply chain issues.
Shipyards in China and elsewhere have declared force majeure on their shipbuilding contracts amid their inability to resume normal production on newbuild, repair and conversion projects. Specifically, the outbreak has caused disruption to supply of materials and equipment from subcontractors and shortage of labor force.
Given the situation, shipowners are facing potential delays in the delivery of their ships.
World Maritime News Staff