Huaxing Machinery Corp. Announces Formation of Leasing and Finance Company
11 Diciembre 2013 - 4:55PM
Marketwired
Huaxing Machinery Corp. Announces Formation of Leasing and Finance
Company
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec 11, 2013) -
Huaxing Machinery Corp. (TSX-VENTURE:HUA) ("Huaxing" or the
"Company") is pleased to announce that a joint venture agreement
(the "JV Agreement") has been reached between the Company and
Shandong Huaxing Mechanical Inc. ("Shandong Mechanical") whereby
the two partners have agreed to set up a joint venture company in
Shandong Province, China to engage in the business of equipment
financing and leasing.
The joint venture company, Shandong Minghua Financial Leasing
Co., Ltd. ("Minghua"), will primarily provide financing and leasing
arrangements for the customers of the Company's subsidiary Shandong
Gold Rhino Huaxing Machinery Corp. ("SGRHM").
About Huaxing Machinery Corp.
Huaxing is a manufacturer of stone processing equipment and
steel structure fabrication equipment. Through its wholly owned
subsidiary Gold Rhino Limited ("Gold Rhino"), a Hong Kong company),
Huaxing holds an 80% controlling equity interest in SGRHM, the
manufacturing entity located in Boxing County, Shandong Province,
China. Its main products are stone processing equipment and robotic
welding system for steel structure fabrication. The processed
stones and steel structures are both used in the building and
infrastructure construction industry. Shandong Mechanical holds the
remaining 20% equity interest in SGRHM.
Shandong Minghua Financial Leasing Co., Ltd.
Minghua is a joint venture company formed pursuant to the JV
Agreement on September 13, 2013 under the Chinese Corporate Law and
Chinese Sino-Foreign Joint Venture Law. The registered equity
capital of Minghua is US$10,000,000. The Company, through its
wholly owned subsidiary Gold Rhino, will earn a 25% equity interest
in Minghua by contributing a total of US$2.5 million in Minghua,
while Shandong Mechanical will earn a 75% equity interest in
Minghua by contributing US$7.5 million. Shandong Mechanical and
Gold Rhino shall pay their respective cash equity contributions in
instalments. The first instalments to be made by Gold Rhino and
Shandong Mechanical are in the amounts of US$375,000 and
US$1,125,000 respectively and must be paid within three months of
the date on which the business license for Minghua was issued which
was September 13, 2013 (the "License Date"). The balance of the
contributions, US$2,125,000 as to Gold Rhino and US$6,375,000 as to
Shandong Mechanical, must be paid within two years from the License
Date, at any time and in any amounts.
The term of the Minghua joint venture shall be thirty years and
may be extended by mutual agreement of the two shareholders. The
registered address of Minghua is Suite1801, Building 8, Shuntai
Plaza, No. 2000 Shunhua Road, Gaoxin District, Jinan City, Shandong
Province, People's Republic of China.
Gold Rhino's first instalment of US$375,000 will be financed by
way of unsecured shareholder loans bearing an interest of 6% with
no repayment term.
The main business of Minghua is the leasing and financing (lease
to own) of SGRHM's robotic welding systems, and stone processing
equipment for SGRHM's customers. With the leasing and financing
license, Minghua can leverage its equity capital with loans from
Chinese banks to finance its leasing operations.
The establishment of Minghua, said Xianhua Sun, Chairman of
Huaxing, is expected to greatly facilitate the marketing of our
robotic welding system, which is priced at US$2 to 3 million per
set. The licensing and financing by Minghua will make the equipment
more affordable to steel structure fabrication companies.
Forward-Looking Statements
Certain information regarding Huaxing and its subsidiaries
contains herein may constitute forward-looking statements within
the meaning of applicable securities laws. Forward-looking
statements may include estimates, plans, expectations, opinions,
forecasts, projections, guidance or other statements that are not
statements of fact. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to have been correct. The Company cautions that actual
performance will be affected by a number of factors, many of which
are beyond the Company's control, and that future events and
results may vary substantially from what the Company currently
foresees. The Company assumes no obligation to update such
forward-looking statements, except as required by applicable
securities laws or exchange regulations. The Company's
forward-looking statements are expressly qualified in their
entirety by this cautionary statement. The Company seeks safe
harbour.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Huaxing Machinery Corp.Y.B. Ian HeDeputy
Chairman604.306.5867
(TSXV:HUA)
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