Companies

China tightens refinancing rules for listed firms

(Agencies)
Updated: 2010-10-22 11:32

Listed companies in China must not use refinancing as a means to bolster cash flow and repay bank loans, Reuters reported, citing Friday's China Securities Journal.

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When seeking to raise equity, the firms should clearly state the total amount of funds to be raised and how the money will be used, an unidentified official at China's Securities Regulatory Commission told the Chinese newspaper.

The move is part of a series of measures the Chinese government has taken to pare excess liquidity and cool its fast-growing economy.

Beijing has already restricted new financing for Chinese firms in nine key industries, including steel and cement manufacturers. Property firms seeking financing will also need to "solicit the opinion" of the Ministry of Land and Resources.