China Recycling Energy Corp. Raises US$26.75 Million in Loan Capital to Finance Erdos Power Generation Project
08 Dezembro 2009 - 11:30AM
PR Newswire (US)
XI'AN, China, Dec. 8 /PRNewswire-Asia-FirstCall/ -- China Recycling
Energy Corp. (OTC Bulletin Board: CREG; "CREG" or "the Company"), a
leading industrial waste-to-energy solution provider in China,
announced the successful raise of RMB 181,880,000 (approximately
US$ 26.75 million) of loan capital to support the Company's Erdos
power generation projects. The capital was raised through the
formation of the Low Carbon Fortune-Energy Recycling No. 1
Collective Capital Trust Plan ("Plan") by Beijing International
Trust Co., Ltd. ("Beijing Trust") on December 3, 2009. All amounts
raised under the Plan are to be loaned to Erdos TCH Energy Saving
Development Co., Ltd ("Erdos TCH"), a joint venture of Xi'an TCH
Energy Technology Co., Ltd. ("Xi'an TCH"), a subsidiary of the
Company, and Erdos Metallurgy Co., Ltd. ("Erdos Metallurgy"), based
upon the Capital Trust Loan Agreement (the "Agreement") entered
into by Erdos TCH and Beijing Trust on November 19, 2009. Beijing
Trust will lend the money to Erdos TCH for its waste heat power
generation project phase II and phase III construction and
operation, through which Erdos TCH will recycle heat from groups of
furnaces of Erdos Metallurgy's metal refining plants to generate
power and steam, which will then be sold back to Erdos Metallurgy.
"We are very pleased to have successfully raised the capital needed
to continue progress on the Erdos TCH project without any dilution
to our shareholders," Mr. Guohua Ku, Chairman and CEO of CREG,
said. "This financing will ensure our continued strong growth in
revenue and earnings while demonstrating our responsible and
innovative management of investor capital." The Plan includes
145,500,000 category A preferred trust units (approximately US$
21.4 million) (category A1 preferred trust 12,450,000 units
(approximately US$ 1.8 million), category A2 preferred trust
15,000,000 units (approximately US$ 2.2 million), category A3
preferred trust 118,050,000 units (approximately US$ 17.4
million)); and 36,380,000 category B secondary trust units
(approximately US$ 5.35 million) (category B1 secondary trust
9,100,000 units, approximately US$ 1.34 million and category B2
secondary trust 27,280,000 units, approximately US$ 4.01 million).
The B1 units are purchased by members of management of Erdos TCH
and the B2 units are purchased by Xi'an TCH. Under the Agreement,
the annual base interest rate is 9.94% for A1 preferred trust fund
units with a term of two years, 11% for A2 preferred trust fund
units with a term of three years, 12.05% for A3 preferred trust
fund units and 8.35% for the category B secondary trust fund units,
each with a term of four years. Besides the base interest rate,
Erdos TCH agrees to share the benefits from Clean Development
Mechanism ("CDM") under the Kyoto Protocol equally with Beijing
Trust during the term of the loan, as well as to pay a management
incentive benefit to be calculated by a formula tied to Erdos TCH's
net profit and average registered capital of the fiscal year prior
to the maturity date of the loan. Under the formula the management
incentive benefit will be paid at the end of Year 4 and can range
between 0% and 100% of the net profit of Erdos TCH in the fiscal
year prior to the maturity date of the loan depending upon the
amount of average contributed capital of Erdos TCH at the time of
measurement. Erdos TCH has agreed to provide a lien on its
equipment, assets and accounts receivable to guarantee the loans
under the Agreement. Xi'an TCH and Mr. Guohua Ku also will provide
unconditional and irrevocable joint liability guarantees to Beijing
Trust for Erdos TCH's performance under the Agreement. Erdos
Metallurgy will provide a commitment letter on minimum power
purchase from Edros TCH. On December 4, 2009, Beijing Trust also
announced the first expansion of the Plan, to raise up to
30,000,000 additional units at 1 yuan per unit (approximately US$
4.4 million totally) from December 7, 2009 to December 15, 2009.
The money, if raised, will also be lent to Erdos TCH under the
Agreement. About China Recycling Energy Corp. China Recycling
Energy Corp. (OTCBB: CREG.OB; "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: +86-29-8765-1097 Email:
In USA: Mr. Howard Gostfrand American Capital Ventures, Inc. Tel:
+1-305-918-7000 Email: DATASOURCE: China Recycling Energy Corp.
CONTACT: in China, Leo Wu, Investor Relations, China Recycling
Energy Corp., +86-29-8765-1097, ; or in the USA, Howard Gostfrand
of American Capital Ventures, Inc., +1-305-918-7000, Web site:
http://www.creg-cn.com/
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