China National Building may sell assets to cut debt

China National Building may sell assets to cut debt
Published: 10 February 2009

China National Building Material Co., the country’s second-biggest cement maker, may sell assets to reduce a record amount of debt that is creating an overhang on the stock, said President Cao Jianglin.

CNBM, as the company is known, “is investigating” selling equipment and leasing it back to bolster cash flow, Cao said in an interview.

“In good economic conditions, the gearing ratio will naturally decrease when operating cash comes in,” said Sinopac Asia Securities Ltd. analyst Jay Zhou in Shanghai. “Now that cash flow isn’t adequate and the high ratio has persisted, investors are nervous.”