SINGAPORE, Feb. 8, 2017 /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") ("2017 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 issued by HLGE in 2006 and which matured on
July 3, 2009. 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 2017 Loan
Agreement, been extended for one year from July 2017 and is due for repayment in
July 2018. Under the terms of the
2017 Loan Agreement, the interest payable is the aggregate of a
margin of 0.4% 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 February 7, 2017. 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 2017 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
namely in Qingdao, Shandong Province, China as a result of the highly competitive
market; (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 2015, GYMCL sold 364,567 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:
Investor
Relations
Dixon Chen
Tel: +646-726-6511
Email: cyd@bluefocus.com
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SOURCE China Yuchai International Limited