China's stock exchanges introduce measures to facilitate refinancing for listed companies

Chinese stock exchanges announced measures on Monday to facilitate refinancing by "high-quality" listed companies to help them innovate or expand into new businesses.

The move represents China's latest effort to reform its capital markets and promote innovation, and will help "foster world-class companies" in China, the Shanghai, Shenzhen and Beijing bourses said in identical statements.

Listed companies trading below their initial public offering price will be able to raise funds via private share placements or convertible bond issuance.

The exchanges also pledged to streamline reviews to make refinancing easier for firms with solid corporate governance, strong disclosure practices and good market recognition.

Proceeds could be used to fund new businesses and technologies that create synergies, but companies must not blindly diversify their business, the exchanges said.

Financing will also be made easier for innovative companies with few actual assets but intensive investment in research and development.

The refinancing process will be strictly scrutinized, however, to weed out "sick companies", the exchanges said.

China' stock markets are flirting with 10-year highs and regulators have stepped up efforts to cool the market.

The new measures don't mean looser regulations, as preventing risks remains a key task for stock exchanges, the official Xinhua News Agency said.

Reuters