SINGAPORE, Feb. 11, 2015 /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") ("2015 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"). However, the principal amount has been reduced to
S$68,000,000 pursuant to partial
repayments of S$10,000,000,
S$8,000,000 and S$7,000,000 made by HLGE in February 2011, April
2012 and July 2013
respectively. 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 2015 Loan
Agreement, been extended for one year from July 2015 and is due for repayment in
July 2016. Under the terms of the
2015 Loan Agreement, the interest payable will remain as the
aggregate of a margin of 1.00% per annum and the 12-month Singapore
Interbank Offer Rate expressed in a percentage rate fixed by the
Association of Banks in Singapore
for Singapore Dollars as of February 10,
2015. 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 2015 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 (i) the continued challenges facing
HLGE's hospitality operations in China from increasing competition and high
operating costs which impacted on its results; (ii) the weak
financial position 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 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 and are not prejudicial to the
interests of the Company and its shareholders.
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:
Kevin Theiss
Grayling
Tel: +1-646-284-9409
Email: cyd@grayling.com
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SOURCE China Yuchai International Limited