XI'AN, China, Sep. 1 /PRNewswire-Asia/ -- China Natural Gas, Inc. ("China Natural Gas" or the "Company") (Nasdaq: CHNG), a leading provider of compressed natural gas (CNG) for vehicular fuel and pipeline natural gas for industrial, commercial, and residential use in Xi'an, China, today provided an update regarding the Company's senior notes with Abax Lotus Ltd. ("Abax").
As previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, the Company entered into a domestic bank loan on February 26, 2010 which violated certain terms of the Company's senior notes with Abax Lotus Ltd. ("Abax"). As a result, Abax has the right to declare a default and demand an immediate repayment with all accrued interest. If Abax declares a loan default, the Company has 30 days to correct the violation or must pay the entire loan amount. Abax has currently issued no notice of default on the debt instruments.
Mr. Qinan Ji, Chairman and CEO of China Natural Gas, stated, "Our senior management traveled to Hong Kong last week to meet with Abax and had a friendly discussion regarding the debt restructuring. A tentative restructuring agreement with Abax is currently in place, and we anticipate that the debt restructuring will be resolved very soon. We are also holding internal board meetings and engaging independent consultancy to take immediate remediation measures to strengthen our internal controls. We expect to provide our investors with a positive update on our progress again very soon."
About China Natural Gas, Inc.
China Natural Gas transports and sells natural gas to vehicular fueling terminals, as well as commercial, industrial and residential customers through its distribution networks in China's Shaanxi and Henan Provinces. The Company owns approximately 120 km of high-pressure pipelines and operates 25 CNG fueling stations in Shaanxi Province and 12 CNG fueling stations in Henan Province. China Natural Gas' four primary business lines include: (1) the distribution and sale of CNG through Company-owned CNG fueling stations for hybrid (natural gas/gasoline) powered vehicles; (2) the installation, distribution and sale of piped natural gas to residential, commercial and industrial customers through Company-owned pipelines; (3) the distribution and sale of gasoline through Company-owned CNG fueling stations for hybrid (natural gas/gasoline) powered vehicles; and (4) the conversion of
gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles through its auto conversion division.
Forward-Looking Statements
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future plans and goals of the JV with CNPC and its prospects are forward looking and subject to risks. China Natural Gas, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statements on Forms S-1 and S-3, in each case as amended. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
