Investors including the Li Ka Shing Foundation and China Life Insurance are to buy HK$2 billion ($256 million) of China Timber Resources Group (CTRG) convertible bonds to finance an expressway in Mongolia, Reuter reported Tuesday.

The bonds will be used to raise CTRG's stake in Inner Mongolia Zhunxing Heavy Haul Expressway Company Limited to 51 percent, and as general working capital.

The heavy-duty toll expressway connects a major coal production base in the area with a major logistics hub for coal distribution, and will ease distribution bottlenecks.

Li Ka Shing (Canada) Foundation, China Life Insurance (Overseas) Company Limited and Dr Lo Ka Shui will buy convertible bonds of HK$1.3 billion, HK$600 million and HK$100 million, respectively, CTRG said.

The three-year bonds will pay an annual coupon of 9 percent, with a conversion price of HK$0.40 per share, a premium of 11.1 percent to the average closing price for the last five trading days.

The bonds will be convertible into 19.85 percent of the enlarged share capital of CTRG, CTRG said.

Li Ka Shing Foundation will own 12.9 percent of CTRG, while China Life Insurance and Dr Lo Ka Shui will have 5.95 percent and 1.4 percent.

Deutsche Bank Hong Kong is the sole agent for the bonds.