November 16 -- The Ministry of Railways, which had recently suffered liquidity problems, plans to issue 30 billion yuan worth of seven-year and 10-year bonds on November 22, reports 163.com, citing IFR, an affiliate of Reuters. This will be the last bond issuance by the ministry in 2011. 

The Ministry of Railways had issued 70 billion yuan worth of bonds in three phases on October 12, October 26, and on November 8.

According to the ministry's third-quarter report, it had accounts payable of 250 billion yuan, of which it owed 200 billion yuan to China Railway Group Limited and China Railway Construction Corporation (601186).

It is also obliged to pay a total of 40 billion yuan to CSR Corporation (601766) and China CNR Corporation (601299).

Local media reported that a total of 10,000 kilometers of railway projects were halted due to a lack of capital, while workers at some of these projects suffered from delays in salary payments.

The Ministry of Railways had since October obtained 270 billion yuan through a combination of loans and proceeds from bond issuance. Some of these funds were used to pay suppliers such as CSR and CNR. However, this sum of capital is not sufficient for the company to resume projects which were halted.

The Ministry of Finance announced that it will cut taxes on interest earned from the bonds issued by the Ministry of Railways by half.

With the government's support, the ministry issued 15 billion yuan worth of seven–year bonds at 4.63 percent on November 8.

Source:Capitalvue