November 1 -- CSR Corporation (601766.SH, 1766.HK), one of China's top two train manufacturers, won the approval of the State-owned Assets Supervision and Administration Commission (SASAC) for its nine billion yuan private placement, reports yicai.com, citing a company filing.
According to Xinhua Press, the fundraising difficulties faced by the rail construction sector began to ease since the beginning of October following the support shown by several government finance departments.
CSR Corporation announced in June that it planned to raise six billion yuan through a private placement to parent China South Locomotive and Rolling Stock Industry (Group) Corporation, and another five billion yuan from a private placement to the Social Security Fund.
Following the Wenzhou high-speed train collision on July 23, the company reduced the scale of its private placement from 11 billion yuan to nine billion yuan in September, lowering the issue price from 6.02 yuan to 4.46 yuan per share.
CSR Corporation, which will hold a shareholders' meeting on November 7 to review the revised private placement plan, said yesterday that its financial status improved following the receipt of six billion yuan of accounts receivable from the Ministry of Railways on October 31.
According to CSR, accounts receivable rose 23.92 billion yuan from the beginning of the year to 35.09 billion yuan through the end of the third quarter due to some of its main customers delaying payment.
Company chairman Zhao Xiaogang, said the Ministry of Railways is the biggest customer of the company, accounting for more than 50 percent of total orders.
According to Zhang, arrears in payments by the ministry had risen this year compared with previous years due to the macro economy.
In addition, the Ministry of Railways normally makes most of the payments in the fourth quarter, usually in November and December.
According to CSR, the payment ability of the Ministry of Railways was enhanced following the successful issuance of 40 billion yuan worth of debt last month.
The Ministry of Railways had raised 145 billion yuan via the issuance of various types of debt during the first three quarters, an increase of more than 50 percent year-on-year.
Shares of CSR Corporation were up 0.91 percent to close the morning session at 5.53 yuan per share.