SINGAPORE, Jan. 27, 2016 /PRNewswire/ -- China Yuchai
International Limited (NYSE: CYD) ("China Yuchai" or the
"Company"), announced today that its wholly-owned subsidiary
Venture Lewis Limited ("VLL") has entered into a loan agreement
with HL Global Enterprises Limited ("HLGE") ("2016 Loan Agreement")
for the extension of a loan of S$68,000,000 ("Loan") to HLGE. The original
amount of the Loan was S$93,000,000
which was granted to HLGE in February
2009 to refinance the zero coupon, unsecured,
non-convertible bonds ("Bonds") issued by HLGE in 2006 and which
matured on July 3, 2009 ("Maturity
Date"). The principal amount has been reduced to S$68,000,000 pursuant to partial repayments
totaling S$25,000,000 made by HLGE in
2011, 2012 and 2013 from disposal of assets. The Company through
another wholly-owned subsidiary, Grace Star Services Ltd., owns
48.9% of the issued ordinary shares of HLGE.
The unsecured Loan has, pursuant to the terms of the 2016 Loan
Agreement, been extended for one year from July 2016 and is due for repayment in
July 2017. Under the terms of the
2016 Loan Agreement, the interest payable is the aggregate of a
margin of 0.5% per annum and the 12-month Singapore Interbank Offer
Rate ("SIBOR") expressed in a percentage rate as calculated by
Reuters as the official calculation agent of SIBOR for the
Association of Banks in Singapore,
for Singapore Dollars, as at 11.00
a.m. on January 26, 2016. In
the event the interest rate charged on external funds utilized by
China Yuchai for their investment in HLGE is increased, the Company
has a right to negotiate with HLGE with a view to agreeing on an
increase in the interest rate payable by HLGE under the 2016 Loan
Agreement subject to compliance with certain regulatory
requirements. A negative pledge undertaking against any disposal or
creation of security over substantially all of HLGE's assets
without VLL's consent is also included.
The Company's Board of Directors approved the Loan extension
after taking into account the relevant circumstances including (i)
the continued challenges facing HLGE's hospitality operations in
China amid the slower China economy and the oversupply of hotel
rooms in both China and
Malaysia; (ii) the weak financial
condition of HLGE and its difficulties in obtaining financing from
financial institutions; (iii) the need to provide support to HLGE
to ensure its ability to continue as a going concern; and (iv) the
continued efforts made by HLGE to explore potential opportunities,
including disposal of non-core assets, to improve its
financial position. This transaction has also been reviewed and
approved by the Company's audit committee who has determined that
the terms of the Loan extension are fair and reasonable.
About China Yuchai International
China Yuchai International Limited, through its subsidiary,
Guangxi Yuchai Machinery Company Limited ("GYMCL"), engages in the
manufacture, assembly, and sale of a wide variety of light-,
medium- and heavy-duty engines for trucks, buses, passenger
vehicles, construction equipment, marine and agriculture
applications in China. GYMCL also
produces diesel power generators. The engines produced by GYMCL
range from diesel to natural gas and hybrid engines. Through its
regional sales offices and authorized customer service centers, the
Company distributes its engines directly to auto OEMs and retailers
and provides maintenance and retrofitting services throughout
China. Founded in 1951, GYMCL has
established a reputable brand name, strong research and development
team and significant market share in China with high-quality products and reliable
after-sales support. In 2014, GYMCL sold 483,825 engines and is
recognized as a leading manufacturer and distributor of engines in
China. For more information,
please visit http://www.cyilimited.com.
For more information, please contact:
Shiwei Yin
Grayling
Tel: +1- 646-284-9474
Email: cyd@grayling.com
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SOURCE China Yuchai International Limited