XI'AN, China, Feb. 6, 2015 /PRNewswire/ -- China Recycling Energy Corp. (NASDAQ: CREG; "CREG" or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced that its Waste Heat Power Generation System ("WHPG System") originally leased to Zhong Gang Group Bin Hai Industry Co., Ltd. ("Zhong Gang") was transferred to Zhong Gang for a price of about US$9.8 million (RMB60.0 million) recently.
Under the original lease contract, CREG was leasing the WHPG System to Zhong Gang for 9 years from the day the system became operational in October 2010 until September 2019. However, Zhong Gang Group, a large Chinese steel company that is the controlling shareholder of Zhong Gang, is undertaking a restructuring of its businesses that involves the discontinuation of many system outsourcing arrangements, including the WHPG System, to operate and manage those systems in-house going forward.
After negotiations with Zhong Gang, the Company has agreed to an early transfer of the WHPG System for an early termination fee of approximately US$9.8 million. According to Company's estimates, this amount is fairly close to the discounted cash flow value of the total principal repayment and interest income on sales-type leases of US$11.3 million (RMB69.3million) receivable by the Company during the period from January 1, 2015 to September 30, 2019.
Mr. Guohua Ku, Chairman and CEO of CREG commented, "We believe that the early termination fee is fair, taking into account the time value of money, and the opportunity to deploy the cash to more profitable projects in the near future. We welcome this additional boost to our cash flow at a time when we need to fund new projects already under contract. We know there is substantial demand for our systems going forward and we remain fully confident in our ability to increase long-term value for our shareholders."
About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ: CREG or "the Company") is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1 percent of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The management and engineering teams have over 20 years of experience in industrial energy recovery in China. For more information about CREG, please visit http://www.creg-cn.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Recycling Energy Corp. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. 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, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact:
Mr. David Chong, Chief Financial Officer China Recycling Energy Corp. Tel: +86-1370-1813139; +65-9721 6163 Email: firstname.lastname@example.org
Ms. Xiaoyan Su (China) Vice President Tel: +86-10-59001548 Email: email@example.com
Mr. Christian Arnell (China) Vice President Phone: +86-10-59001548 E-mail: firstname.lastname@example.org
SOURCE China Recycling Energy Corp.