China Energy Engineering (HKG:3996) is forming a partnership fund with its subsidiaries that would invest surplus cash within the business, according to a Friday filing with the Hong Kong bourse.
The construction firm entered an agreement with 10 of its subsidiaries to form the fund with a proposed capital of 4 billion yuan, of which the company and its units will subscribe to 3.8 billion yuan.
The fund will not be used for external investments and instead invest in "high-quality subsidiaries" of the company, China Energy Engineering said.
The partnership's investment strategy is to replace part of the group's high-cost equity financing, the firm added.