Qinfa Announces the Disposal of Zhuhai Qinfa Port Co., Limited

HONG KONG, June 29, 2015 /PRNewswire/ -- China's leading integrated coal operator China Qinfa Group Limited ("Qinfa" or "The Group") (Stock Code: 866.HK) announced the transaction in relation to the disposal of 60% of the equity interest of its wholly owned subsidiary of the Group, Zhuhai Qinfa Port Co., Limited. ("the Zhuhai Qinfa Port") to Zhuhai Port Logistics Centre Co., Limited ("the Purchaser"). Upon the completion of the transaction, the Group's bank loans will be significantly reduced by RMB1,304 million, which will significantly lower its financial cost in the near future.

The Consideration for the disposal is RMB350 million, which shall be paid in cash by the Purchaser. The net proceeds from the disposal, after deducting the sum of approximately RMB225 million paid to the pledgee for releasing the pledge of the 60% equity interest of the Zhuhai Qinfa Port and the expenses attributable to the disposal of approximately RMB2 million, are estimated to be approximately RMB123 million, and are expected to be applied as the general working capital of the Group.

The net assets, net current liabilities and long-term bank loans of Zhuhai Qinfa Port were approximately RMB540 million, RMB303 million and RMB1,041 million respectively. Through the disposal, the bank loans of the Group will decrease by approximately RMB1,084 million, which will lead to a significant decrease of the finance cost of the Group in near future, enabling the Group to lower its gearing ratio immediately after Completion. It also offers the Group a good opportunity to realize a gain and generate cash inflow at the same time.

Mr. XU Jihua, the Group's Chairman and Executive Director, said, "The selling of the Zhuhai Qinfa Port enables the Group to continue its development with less financial burden, allowing us to reallocate our financial resources and direct our focus on businesses which has growth potential and promising long term prospects. This includes our continuously growing shipping business which have already generated positive cash flow as well as the Zhuhai Hengqin Coal Exchange Centre which will fully exert the potential of 'Internet Plus', by combining online and offline trading platform and provision financial and professional services to coal traders."

Mr. Xu continued, "Furthermore, as the recent coal price has begun to show signs of improvement, our Group will fully capture this opportunity and focus on coal mining business with a high gross profit rather than coal trading business with lower profit margin. We also intend to make the best use of our current resources and business advantages in order to enhance the revenue of our Group and increase our competitiveness."

About China Qinfa Group Limited (Stock Code: 866.HK)

Established in 1996, China Qinfa Group Limited is an integrated coal enterprise with a completed industrial logistics system. The Group principally engaged in coal-related businesses, including coal mining, procurement, filtering, blending, storage, transportation, sales, shipping operations, and is dedicated to building an integrated supply chain. The Group's industrial chain has currently formed an integration of mine, station and shipping; while its logistics system has formed a supply chain consisted of production, transportation and marketing. This makes the Group a large coal operating listed company with an equipped asset allocation, modernized, professional and intensive industrial chain. Qinfa was listed on the HKEx mainboard on 3 July, 2009.

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