HANZHONG, China, March 15, 2011 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (Nasdaq: HGSH) ("China HGS" or "the Company"), a leading residential property developer in China's southern Shaanxi province, today announced that the Company's wholly owned operating subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd. ("Shaanxi Guangsha") entered into a new revolving credit facility totaling approximately RMB 500 million (approximately $76.3 million) with the Hanzhong Branch of China Construction Bank on March 4, 2011.
Under the terms of the credit facility, Shaanxi Guangsha can borrow up to RMB 499,994,692 Yuan at an interest rate equal to the benchmark lending rate designated by the People's Bank of China ("PBC"), China's central bank.
This credit facility has a one-year term, and Shaanxi Guangsha can apply for renewal at the end of the 12-month period. Shaanxi Guangsha is under no obligation to utilize all or part of the credit facility.
"We are pleased to enter into this credit facility to support our working capital needs and appreciate the support that we have received from China Construction Bank, which has substantial expertise in serving the real-estate and infrastructure sectors in China. The entry into this credit facility is an important first step towards developing strong long-term banking relationships for the benefit of our company and its shareholders," commented Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc. "We believe that the cash flow generated from our operations, together with the significantly enhanced borrowing power from our new credit facility, will provide us with the necessary liquidity and flexibility to support our business and continue to achieve our future growth plans and strategic objectives."
About China HGS Real Estate Inc.
China HGS Real Estate Inc., through its wholly owned subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd., specializes in real estate development in China's second-tier and third-tier cities. The Company's real estate properties include multi-layer, sub-high-rise, and high-rise apartment buildings. The Company possesses the national grade II real estate qualification and was ranked as the No. 1 property developer in Hanzhong, Shaanxi Province in terms of market share in 2007 and 2008 successively.
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, 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. 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 those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its 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 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:
Investor Relations Contact:
Mr. Ran Xiong, Deputy GM
Mr. Crocker Coulson, President
Tel: +1-646-213-1915 (New York)
Mr. John Harmon, Sr. Account Manager
Tel: +86-10-6561-6886 (Beijing)
SOURCE China HGS Real Estate Inc.