BEIJING, Sept. 1 /PRNewswire-Asia-FirstCall/ -- Yongye International, Inc. (Nasdaq: YONG) ("Yongye" or the "Company"), a leading manufacturer, developer and distributor of "Shengmingsu" brand plant and animal nutrient products in China, today announced that the Company's operating subsidiary, Yongye Nongfeng Biotechnology ("Yongye Nongfeng"), entered into two new revolving credit facilities totaling RMB 400 million (approximately $59 million).
Under the terms of the revolving credit facility with the Agricultural Bank of China, Yongye Nongfeng can borrow up to a total of RMB 300 million (approximately $44 million) at an interest rate equal to the benchmark lending rate designated by the People's Bank of China ("PBC"), China's central bank.
Under the terms of the revolving credit facility with the China CITIC Bank, Yongye Nongfeng can borrow up to a total of RMB 100 million (approximately $15 million) at an interest rate that is 30% above the benchmark lending rate designated by the PBC.
The credit facilities have one-year terms and Yongye Nongfeng can apply for renewal at the end of the 12-month period. Yongye Nongfeng has no obligation to utilize all or part of the credit facilities.
"We are pleased to be able to enter into these credit facilities to support our working capital needs," stated Mr. Zishen Wu, Chief Executive Officer of Yongye International. "We appreciate the support that we have received from our lending institutions, including the Agricultural Bank of China, which has the best expertise to serve the agricultural business community and recently completed the world's largest initial public offering. We believe these credit facilities are an important first step towards developing strong long-term banking relationships for the benefit of our company and shareholders."
"This new credit facility will provide us with additional capital flexibility and liquidity as we continue to rapidly grow our business. Our business exhibits a strong seasonality, with between 70% and 80% of our annual sales occurring in the second and third quarters. As such, we have significant inventory needs. In addition, we provide our key distributors with three-to-six month credit terms. We are confident in extending these terms to our distributors as we have very safe accounts receivable, with no accounts receivable outstanding over six months and no bad debt. In fact, in the second quarter of 2010, our accounts receivable collection significantly improved to 32 days compared to 42 days in the prior year period. We also expect our future cash outflow needs to decrease after we complete our vertical integration and the acquisition of the lignite coal resource project, which is expected to close by the end of the year. Overall, we believe that our improved operating cash flow together with our significantly enhanced borrowing power from our new credit lines provides us with the necessary flexibility to support our business and continue to achieve our growth plans and strategic objectives."
About Yongye International
Yongye International is a Chinese agricultural nutrient company headquartered in Beijing, with its production facilities located in Hohhot, Inner Mongolia, China. Yongye markets two lines of organic nutrient products: a liquid nutrient product which is sprayed on plants and a powder nutrient product which is added to animal feed. Both products are sold under the brand name "Shengmingsu," which means "life essential" in Chinese. The Company's patented and patent pending formulas and proprietary extraction processes allow it to create products that increase crop yields and improve the health of livestock. The Company sells its products primarily to provincial or regional level distributors, who then channel those products to a carefully selected network of independently-owned Yongye branded stores in China. For more information, please visit the Company's website at http://www.yongyeintl.com .
Safe Harbor Statement
This press release contains certain statements that may include "forward-looking statements." 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, involving 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. You 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 the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (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 risk 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: Yongye International Mr. Larry Gilmore-VP of Corporate Strategy Phone: +1-626-319-4742 (U.S.) Tel: +86-10-8232-8866 (China) Email: firstname.lastname@example.org Ms. Wendy Xuan-Business Associate Phone: +86-10-8232-8866 x 8827 Email: email@example.com CCG Investor Relations Mr. Crocker Coulson, President Phone: +1-646-213-1915 Email: firstname.lastname@example.org Athan Dounis, Account Manager Phone: +1-646-213-1916 Email: email@example.com
SOURCE Yongye International, Inc.