- Letter of Intent Signed For Additional Credit Line -
- Up to $24 million in Production Expansion Capital Obtained -
JINZHOU CITY, Liaoning Province, China, Oct. 5 /Xinhua-PRNewswire-FirstCall/ -- Wonder Auto Technology, Inc. (NasdaqGM: WATG) ("Wonder Auto" or the "Company"), a leading manufacturer of automotive electrical and suspension parts in China, today announced that its wholly owned subsidiary, Jinzhou Halla Electrical Equipment Co., Ltd. ("Jinzhou Halla"), has been extended a credit line by the Bank of China, Jinzhou Tiebei branch, for a credit facility of approximately $10.67 million (80 million yuan). Additionally, Jinzhou Halla has entered into a Letter of Intent for another line of credit approximating $13.3 million (100 million yuan) with the China Construction Bank. The total loan proceeds which can be drawn under these two Chinese bank credit facilities is approximately $24 million (180 million yuan).
The proceeds from these lines of credit are expected to be used to expand the production capabilities and facilities, and for other working capital needs. Both credit lines are secured by certain assets of Jinzhou Halla. The Bank of China credit line is available through September 24, 2008 and Jinzhou Halla has drawn approximately $4 million (30 million yuan) to date. The China Construction Bank Letter of Intent will become effective upon the signing of the loan agreements.
The credit lines are being offered after completion of the banks' due diligence process of Jinzhou Halla and its growth potential. Jinzhou Halla is a leading producer of starters and alternators for the Chinese automotive market. For the six months ended June 30, 2007, sales of starters and alternators grew by 29.4% to $43.5 million compared with $33.6 million in the same period last year.
About Wonder Auto Technology
Based in Jinzhou City, Liaoning, China, Wonder Auto Technology, Inc., through its Chinese subsidiaries, designs, develops, manufactures and sells automotive electrical parts and suspension products. Wonder Auto was ranked second in sales revenue in the China market for automotive alternators and starters in 2006. With respective 5 different series and over 150 models of alternators, 70 models of starters and various suspension related parts, the Company supplies to a wide range of automakers, engine producers and auto parts suppliers both in domestic China and overseas. Wonder Auto's main customers include Beijing Hyundai Motor Company, Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co., Ltd., Harbin Dongan Automotive Engine Manufacturing Co., Ltd., and Tianjin FAW Xiali Automotive Co., Ltd. For more information, please log onto www.watg.cn
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, among others, those concerning our expected use of the proceeds from the lines of credit as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results of the Company to differ materially from those anticipated, expressed or implied in the forward- looking statements. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward- looking statements. Risks and uncertainties that could cause actual results to differ materially from those anticipated include risks related to new and existing products, product defects and any related product recall; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China; any statements of belief or intention; any of the factors and risks mentioned in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2006 and any subsequent SEC filings. The Company assumes no obligation and does not intend to update any forward-looking statements, except as required by law.
