China Recycling Energy Corporation Announces Funding Projects & Executing of Strategic Cooperation with China Cinda Asset Management Co. Ltd.
-- CREG Secures Funding for Phase IV & V of Erdos Projects
-- Company Seeks to Develop Energy Improvement Projects with Cinda's Portfolio Companies and Clients
XI'AN, China, Aug. 23 /PRNewswire-Asia-FirstCall/ -- China Recycling Energy Corp. (Nasdaq: CREG or "the Company"), a leading industrial waste-to-energy solution provider in China, in conjunction with China Cinda Assets Management Limited Corporation ("Cinda"), one of the largest state-owned financial institutions providing diverse financial services in China and also owner or shareholder of numerous large scale high energy consuming industrial firms which can become clients of CREG's waste-to-energy solutions, today announced its financing project. The two companies also detailed additional information from their recently announced Strategic Cooperative Agreement ('Strategic Agreement'), which was signed on August 18, 2010 in Beijing.
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Under the Strategic Agreement, Cinda will encourage its portfolio companies and clients to cooperate with the Company and assist the Company and its subsidiaries to develop energy improvement projects with Cinda's portfolio companies and clients. In return, the Company will pay service fees to Cinda and its subsidiaries for any business they introduce to the Company or assistance provided to the Company. Cinda agrees that it and its subsidiaries will exclusively work with CREG and will not provide client introduction service to any competitors of the Company, and the Company and its subsidiaries will not enter into any equity participation agreement with any competitors of Cinda and its subsidiaries.
Mr. Weizhong Chen, Vice President of Cinda commented, "Through the cooperative and capital-based agreement with CREG, Cinda is entering the burgeoning energy recycling industry in China with its leader CREG. Many of these projects enjoy strong incentives on almost every government level in China. Cinda is willing to provide overall support in promoting CREG in its efforts of improving energy efficiency and emission reduction in local regions in China."
The projects to be financed by Cinda include Phases IV and V, a total of approximately 39-MegaWatt power capacity energy recycling systems, of the joint venture between Xi'an TCH and Erdos Metallurgy to recycle waste heat from Erdos Metallurgy's refining plants. Cinda will provide CREG with up to RMB 200 million or the equivalent value in U.S. dollars in the form of Convertible Notes and Trust Loans for the construction of and working capital for the projects. The Company anticipates it will begin Phases IV and V at the end of 2010 and they are to be completed within 2011.
The term of the Trust Loans is three years from the date of the first draw down. The interest rate for the Loan is the People's Bank of China ("PBOC")'s three-year base interest rate plus two percent (2%) with redemption rate of 18% simple annual interest for the principal of the loans not exchanged for shares of the Company's common stock. The Notes have a three-year maturity date from the date of the issuance at the first closing. Each Note (and Loan) has a conversion price at the lower of (i) US$ 2.46 per share or (ii) an amount equal to the Company's earnings per share based upon the consolidated earnings of the Company for 2010 on a weighted average fully diluted basis, multiplied by 7. Additional details for terms of the Notes and Loans are available in the Company's Securities and Exchange (SEC) filing on Form 8-K on August 20, 2010.
Mr. Guohua Ku, Chairman and CEO of CREG commented, "The benefits of teaming with Cinda are quickly beginning to bear fruit. We look to Cinda as a strong partner as they have committed to entering the growing waste-to-energy market in China, just as the Carlyle Asia Group did over 2 years ago." Mr. Ku continued, "The vast and deep rooted business relationships and powerful state backing possessed by Cinda throughout China cannot be underestimated. As one of the largest financial asset management firms in China, we have found a dedicated partner who can fulfill our financing needs as well as a powerful generator for new business opportunities. We look forward to updating the investment community as additional waste-to-energy projects become finalized."
Mr. Nicholas Shao, Managing Director of Carlyle Asia Growth Fund, currently CREG's second largest shareholder, commented: "We are happy to see such a strategic partnership being established, since we believe Cinda will bring a tremendous amount of opportunity and the capital needed to support CREG's rapid growth plans. As one of the largest shareholders in the company, we are pleased to see the management add such a critical component to its business."
Note:
On August 18, 2010, a signing ceremony was held in Beijing with its attendance of CREG and all the related parties from Cinda, including China Cinda's Vice President Weizhon Chen, Well Kent International's Board Chairman Xiaozhou Chen and General Manager Jiangu Gu, China Jingu international Trust Co. Ltd's Board Chairman Yong Zhang and General Manager Wei Yu, Cinda Securities Co. Ltd General Manager Zhigang Zhang, Cinda Financial Leasing Co. Ltd's Vice President Ming Zhan, and Cinda Shaanxi Office General Manager Yuejin Li, etc. and in the witness of Carlyle Asia Growth Fund's Managing Director Nicholas Shao and CREG's Board Audit Committee Chairman Sean Shao.
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: [email protected]
In USA:
Mr. Howard Gostfraud
American Capital Ventures, Inc.
Tel: +1-305-918-7000
Email: [email protected]
SOURCE China Recycling Energy Corp.
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