China Carbon Graphite Group, Inc. Announces RMB 180 Million Loan From China Construction Bank
November 08 2010 - 7:00AM
China Carbon Graphite Group, Inc. (OTCBB:CHGI) ( "China Carbon" or
the " Company"), the largest wholesale supplier of fine grain and
high purity graphite in China and one of the nation's top overall
producers of carbon and graphite products, today announced that
during the second and third quarters of 2010, it has received RMB
180 million in total from China Construction Bank through four
loans, which is equal to roughly USD 27 million based on a RMB
to US dollar conversion rate of 6.66 to 1.
Each of these loans has a one year term with an interest rate of
5.41% per year and will be renewable at the lender's option after
the expiration of the loans. The loan agreement provides for
operating and financial covenants typical for loan transactions of
this type. Proceeds of the loans will be used by the Company
to purchase raw materials, specifically focusing on higher purity
graphite and fine grain graphite materials. This loan facility
enables China Carbon to significantly reduce the risk of price
inflation of raw materials and leverage increased facility
capacity, and expand its profit margin, by allowing the Company to
buy larger amounts of raw materials in advance in order to receive
better pricing.
"We believe the price of raw materials will continue to rise in
the coming years, the loans we received from China Construction
Bank will allow us to lock in the price of our raw materials by
facilitating larger advanced purchase arrangements at better
pricing, in order to hedge against the risk of inflation.
Furthermore, with the increasing sales and price of our products,
we believe we will deliver improved results in next few quarters,
showing incremental increases in our top and bottom line," said
Donghai Yu, the Chief Executive Officer of China Carbon.
"The ability for us to receive these loans on such favorable
terms from one of the largest Chinese banks further shows the
confidence of our business operation and future industry
potential," Donghai Yu continued.
About China Carbon Graphite Group, Inc.
China Carbon Graphite Group, through its affiliate, Xingyong
Carbon Co., Ltd., manufactures carbon and graphite based products
in China. The company is the largest wholesale supplier of fine
grain and high purity graphite in China and one of the nation's top
overall producers of carbon and graphite products. Fine grain
graphite is widely used in smelting for colored metals and
rare-earth metal smelting as well as the manufacture of molds. High
purity graphite is used in metallurgy, mechanical industry,
aviation, electronic, atomic energy, chemical industry, food
industry and a variety of other fields. In September 2007, the
company was approved and designated by Ministry of Science &
Technology as a "National Hi-tech Enterprise." Of the 400 plus
carbon graphite producers in China, China Carbon is the only
non-state-owned company to receive this honor. For more
information, visit www.chinacarboninc.com.
Safe Harbor Statement
This release contains certain "forward-looking statements"
relating to the business of the Company and its subsidiary
companies. These forward-looking statements are often identified by
the use of forward-looking terminology such as "believes,"
"expects" or similar expressions. Such forward-looking statements
involve known and unknown risks and uncertainties that may cause
actual results to be materially different from those described
herein as anticipated, believed, estimated or expected. 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.
CONTACT: Nuwa Group
Investor Relations:
Mr. Kevin Fickle
+1-925-330-8315
Kevin@nuwagroup.com
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