(Yicai Global) Sept. 17 -- Kweichow Moutai Group, which owns the world's largest distiller and most valuable liquor maker, plans to come to the rescue of a Chinese highway operator in financial difficulty.

Moutai will issue CNY15 billion (USD2.2 billion) of bonds whose main purpose is to buy equity in Guizhou Expressway Group, Chinese media reported, citing a statement from the company. The size of the shareholding was not disclosed.

The move will see Moutai, the largest economic entity based in the southwestern Chinese province of Guizhou, diversify business while helping Guizhou Expressway, the province’s leading highway firm, after its first-half toll revenue halved due to an exemption policy in force since the start of the Covid-19 outbreak.

Through the buy-in the distillery giant will transform into an investment company, Xiao Zhuqing, a marketing expert in the industry, told Yicai Global.

Kweichow Moutai has already expanded from its main baijiu liquor business into transport after buying a 70 percent stake in Moutai Airport in its home city of Zunyi and an almost 30 percent stake in the provincial capital’s Guiyang Airport.

The company had over CNY50 billion in revenue, CNY20 billion in net profit, and CNY20 billion in cash in the first six months of this year, and China Chengxin International Credit Rating gave it an AAA credit rating earlier this month.

“Moutai Group not only has funds, but also credit,” Xiao said. “This is a major advantage of the company.”

Guizhou Expressway lost CNY1.98 billion (USD293 million) in the first half after posting steady profits over the past three years. The firm’s outstanding bonds exceed CNY20 billion and its debt-to-asset ratio is hovering around the 70 percent alert level, according to financial data provider Wind Information.

Moutai’s own debt-to-asset ratio will increase to 19.54 percent after the buy-in, still a relatively low level, it said.

Shares of Kweichow Moutai [SHA: 600519] slipped just over 3 percent today to close at CNY1,670.52 (USD246.70) each, giving the company a market capitalization of CNY2.21 trillion (USD326.4 billion). The stock has gained 41 percent so far this year.

Editors: Tang Shihua, Ben Armour