Bulletin: Beijing Infrastructure Investment's New Equity Purchase Burdens Cash Flow

HONG KONG (S&P Global Ratings) July 13, 2020--S&P Global Ratings today said Beijing Infrastructure Investment Co. Ltd.'s (BII) purchase of an 8.73% stake in Beijing Rural Commercial Bank Co. Ltd. (BRCB) will moderately increase BII's cash flow burden. BII's payment of about Chinese renminbi (RMB) 5.7 billion for the BRCB stake comes when the company's operating cash flow from its metro operation and property businesses are likely to be severely hit by the COVID-19 outbreak. Moreover, BII (A+/Stable/--) will incur huge investments in its core metro business. To implement the Phase Two of Beijing's rail transit planning, i.e. 30 lines with a total distance of 1,177 kilometers, and other infrastructure, BII will spend RMB40 billion-RMB45 billion per year over 2020-2021.

...July 13, 2020 HONG KONG (S&P Global Ratings) July 13, 2020--S&P Global Ratings today said Beijing Infrastructure Investment Co. Ltd.'s (BII) purchase of an 8.73% stake in Beijing Rural Commercial Bank Co. Ltd. (BRCB) will moderately increase BII's cash flow burden. BII's payment of about Chinese renminbi (RMB) 5.7 billion for the BRCB stake comes when the company's operating cash flow from its metro operation and property businesses are likely to be severely hit by the COVID-19 outbreak. Moreover, BII (A+/Stable/--) will incur huge investments in its core metro business. To implement the Phase Two of Beijing's rail transit planning, i.e. 30 lines with a total distance of 1,177 kilometers, and other infrastructure, BII will spend RMB40 billion-RMB45 billion per year over 2020-2021. We believe BII has an almost certain likelihood of receiving timely and sufficient support from the Beijing municipal government in a financial distress scenario. In our view, the BRCB transaction aims to strengthen...

Bulletin