Natural gas distributor Xinao Gas Holdings announced plans for a convertible bond issue, raising up to US$70.6 million to fund construction of natural gas filling stations. The company will focus on building business in Shandong and Jiangsu provinces, capitalizing on the rise in petrol prices and the country's tighter environmental rules, finance director Yu Jianchao said. The stations will supply mainly buses and taxis. "Petrol is in tight supply and its price has gone up, while a cubic meter of natural gas, which generates the same amount of energy as a liter of gasoline for cars, costs about 50% less," Yu said. The company will also use US$12.85 million of bond proceeds to repay debt and use the balance for new piped-gas projects.