TAIYUAN CITY, China, Oct. 3, 2011 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China ("PRC"), today announced that it has filed a Post Effective Amendment (the "Amendment") to its Registration Statement on Form S-3 with the Securities and Exchange Commission (the "SEC") to deregister the $50 million shelf registration statement, which was declared effective on February 18, 2011
The shelf registration enabled Longwei to fulfill the registration-related requirements in advance for up to an additional $50 million in securities; the Amendment will deregister these securities. The Form S-3 also included the effective registration of common stock underlying warrants issued by the Company to investors associated with its October 2009 financing, as required under the terms of the financing. The withdrawal of the shelf registration does not deregister the common stock underlying these warrants.
Mr. Cai Yongjun, Chairman and CEO of Longwei, commented, "We are withdrawing the shelf registration to mitigate investor concerns regarding the issuance of securities at the current share price levels. Our operating cash flow is sufficient to fund the total RMB 700 million (approximately $108.3 million USD) purchase price for the assets of Huajie Petroleum, and our balance sheet and operating results remain strong as we head into our second fiscal quarter."
As of June 30, 2011, Longwei had paid a RMB 550 million (approximately $85.1 million USD) deposit toward the total purchase price of RMB 700 million (approximately $108.3 million USD) for the purchase of the assets of Huajie Petroleum Co., Ltd., a fuel storage depot in northern Shanxi Province with a 100,000-metric-ton storage capacity.
"We initially registered the $50 million worth of the Company's securities to accelerate the acquisition of the Huajie Petroleum assets, but when market conditions changed, the Company remained committed to the asset acquisition and funding the purchase price from cash flow generated through operations," stated Michael Toups, CFO of Longwei. "The Company has also remained steadfast in its commitment to shareholders by not issuing additional equity which may be dilutive."
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China. The Company's oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan and Gujiao, Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at competitive prices with timely delivery to coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.
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Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
SOURCE Longwei Petroleum Investment Holding Ltd.