China Recycling Energy receives Attractive Loan

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China Recycling Energy receives Attractive Loan

Despite slowdown across the world, recycling energy companies are receiving funds from banking and financial institutions.

China Recycling Energy, an industrial waste-to-energy solution provider in China, is an example of this.

China Recycling Energy recently announced that its subsidiary, Xi’an TCH Energy Technology, has received an energy saving and emission reduction loan with Industrial Bank.

The Industrial Bank is offering loans at competitive interest rates. The bank will offer a loan of RMB 130,000,000 ($20,312,500) to Xi’an TCH for a term of 48 months from the first take-down of the loan.  

The bank is also supporting the recycling industry in China by relaxing payment terms. The first 9 months of the loan will be a grace period where repayment is not requirement. Xi’an TCH will start to make repayment on the 28th day of the last month of each quarter after the grace period and each payment will include principal in no less than RMB 10,000,000 ($1,562,500).  

The loan agreement has a floating interest rate that resets each quarter at 115 percent of the national base interest rate for the same term and same level loan per annum. The present national base interest rate — People’s Bank of China (PBOC) rate is 7.05 percent and 115 percent of that rate will be 8.1075 percent per annum. These funds will be deployed by CREG to further the construction of a 23 MW waste-to-energy system for its customer Shanxi Datong Coal Group.

With the new special energy saving and emission reduction loan to fund the development of its energy saving projects at a much lower interest rate, the company will initiate the repayment of RMB 75,000,000 in convertible notes and trust loans held by China Cinda Asset Management and its affiliates.

The original financing of RMB 100,000,000 was completed under a Note Purchase Agreement and a Trust Loan Agreement as a part of the strategic cooperation agreement signed on August 18, 2010.  

The interest rate on the convertible notes and trust loan under August 2010 agreements was 18 percent per annum unless the Cinda chooses to convert such notes and loans to common stock shares of the Company.  

Following the repayment, Cinda will still hold RMB 25,000,000 convertible note in CREG and a seat on the Company’s Board of Directors.  Cinda will continue their strategic partnership with the Company in regards to current and future project development and financing of these projects.

“Over the past several quarters, we have been ardently focused on securing lower borrowing rates from both domestic and international financiers. CREG is a highly capital intensive business and therefore, obtaining attractive interest rates on our loans has been of the utmost importance to our management team,” said Guohua Ku, chairman and chief executive officer of CREG.

By GreentechLead.com Team

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