XI'AN, China, July 12, 2011 /PRNewswire-Asia/ -- China Recycling Energy Corp. (NASDAQ: CREG or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced that its wholly owned subsidiary, Xi'an TCH Energy Technology Co., Ltd ("Xi'an TCH"), has entered into a strategic leasing agreement with Cinda Financial Leasing Co, Ltd. ("Cinda Financial"), an affiliate of China Cinda (HK) Asset Management Ltd. Corporation, in order to raise capital needed for the Company's business expansion. The lease agreement signed on June 28, 2011 involves select assets from CREG's Zhongbao Binhai Nickel Industry Co., Ltd., plant located in Cangzhou, Hebei Province of People's Republic of China (PRC).
Under Leasing Agreement, Xi'an TCH transfers its ownership of a set of 7MW steam turbine waste heat power generation system and four furnaces and its ancillary apparatus ("Assets") to Cinda Financial for a consideration of RMB 42.50 million (approximately US$6.64 million), and Cinda Financial in turn leases the Assets to Xi'an TCH for a term of 5 years with an overall leasing fee of RMB 51.54 million (approximately US$8.05 million) based upon the transfer cost and the benchmark interest rate for five year loans by People's Bank of China ("PBOC") (presently 6.65% per annum) plus 15% of that rate (which at present rate will result in an interest rate of 7.6475%). The interest rate will increase if the five year benchmark interest rate of PBOC increases but will remain the same if the benchmark rate decreases in the future. Xi'an TCH shall make pro rata quarterly payments to Cinda Financial for the leasing fees. Upon the completion of the leasing term and full payment of all leasing fees and other fees, Xi'an TCH can pay RMB 4,250 (approximately US$664) to acquire the ownership of the Assets as is at the end of the lease.
In addition to the leasing fees, Xi'an TCH shall pay a onetime non-refundable leasing service charge of RMB 2,550,000 (approximately US$398,438) and a refundable security deposit of RMB 2,125,000 (US$332,031) to Cinda Financial.
Upon its execution of the Leasing Agreement, Cinda Financial has paid entire transfer price of RMB 42.50 million to Xi'an TCH and Xi'an TCH has transferred the ownership of the Assets to the Cinda Financial. The Assets have been in the possession of and used by Xi'an TCH and will continue to be possessed and used by Xi'an TCH under Leasing Agreement.
Xi'an TCH also entered into a Pledge Agreement with Cinda Financial and uses its electricity fee income to guarantee its obligations under Leasing Agreement and Mr. Guohua Ku, the Chairman and CEO of the Company provides his personal guarantee for Xi'an TCH to implement its obligations under Leasing Agreement.
For more information regarding this financial leasing agreement, please refer to the information found on the Form 8-K filed with the Securities and Exchange Commission on July 11, 2011.
About China Cinda Asset Management Limited Corporation
China Cinda Asset Management Corporation ("Cinda") is a solely state-owned financial institution incorporated in 1999 upon approval of State Council. On June 28, 2010, China Cinda Asset Management Corporation was changed into China Cinda Asset Management Limited Corporation, with registered capital of RMB 25.1 billion. As the first assets management corporation, Cinda has China's largest amount of non-performing loans under management. Currently, Cinda is one of the most fully-licensed financial institutions in China and can provide diverse financial services covering banking, life insurance, property insurance, securities, funds, trust and financial leases. Cinda has 29 nationwide offices, and has ownership in more than one hundred state-owned enterprises through debt/equity swaps in 34 basic industries including mining, petroleum, chemical, metallurgy, machinery, non-ferrous metals, textile, iron and steel, building materials, transportation, electric power, automobile, shipbuilding, machinery and electronics, among others, and including some top 500 enterprises in the world or in China, like SINOPEC, CNOOC, Aluminum Corporation of China, Sinochem Group, China Metallurgical Group, Baosteel, SAIC, State Grid and other business groups.
About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ: CREG or "the Company") is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1% of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The management and engineering teams have over 20 years of experience in industrial energy recovery in China. For more information about CREG, please visit http://www.creg-cn.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Recycling Energy Corp. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact:
In China:
Mr. Leo Wu
Investor Relations
China Recycling Energy Corp.
Tel: +86-29-8765-1096
Email: tch@creg-cn.com
In USA:
Mr. Howard Gostfrand
Investor Relations
American Capital Ventures, Inc.
Tel: +1-305-918-7000
Email: info@amcapventures.com
