Beijing gives IPO priority to quake zone companies

SHANGHAI, July 1 (Reuters) - China will give priority to companies in the zone hit by the devastating May 12 earthquake when they attempt raise funds in the stock market, according to a document posted on the central government's website (www.gov.cn).

"Priority will be given to quake zone firms that apply for an IPO or listed companies to raise funds in the stock market," as well as applications from firms that aim to use the funds raised within the quake zone or to produce materials in high demand in earthquake-hit areas, said the document issued by the State Council.

The State Council also outlined a favourable credit policy for firms in the earthquake zone. Companies that received loans before the earthquake and are unable to pay them back on schedule will be given a six-month extension, and such debts will not be recorded as bad loans.

Companies that have been seriously impacted by the quake will also be exempted from enterprise income tax for 2008. (Reporting by Rujun Shen; editing by Jonathan Hopfner)