(Yicai Global) Nov. 2 -- A Chinese automation company is issuing convertible bonds to finance a merger with another firm, which is the first of such deals under new rules. 

Suzhou Secote Precision Electronic will issue convertible bonds and shares to gather financial means for acquiring an advanced manufacturing business, the eastern Chinese firm said in a statement today. The company's stock [SHA: 603283] will be suspended for the process from today.

The China Securities Regulatory Commission said yesterday that convertible bonds may be used as payment methods for mergers to reduce cash flow pressures of listed companies and the risk of major shareholders' equity dilution. Convertible bonds refer to debt instruments that can be turned into a specified number of shares of common stock.

Editor: Emmi Laine