September 6 -- Zhejiang Huahai Pharmaceutical (600521.SH) plans to issue up to 500 million yuan worth of short-term financing bills to optimize its debt structure and to lower finance costs, reports Shanghai Securities Journal, citing a company filing.

Proceeds raised will be used to supplement operating cash flow and to repay bank loans.

Industrial and Commercial Bank of China (601398) was appointed as the underwriter of the bill issuance.

The company's debt ratio hit 37.85 percent as of end June.

Huahai Pharma suffered negative operating cash flow of 2.37 million yuan in the second quarter, compared to operating cash flow of 15.22 million yuan in the same period a year ago.

The company recorded operating cash flow of 48.22 million yuan in the first quarter, while short-term borrowings rose from 150 million yuan to 312 million yuan during the second quarter.

The shortening of the operating cycle was the main reason for the larger capital requirements. Inventory turnover was 180.6 days, down from 368.93 days in the same period a year ago.