AutoChina International Provides Update on Operations and Outstanding Matters, Closes on New $10.1 Million Credit Facility
15 July 2011 - 10:00PM
Business Wire
AutoChina International Limited (“AutoChina” or the “Company”)
(NASDAQ: AUTC), China’s largest commercial vehicle sales,
servicing, leasing, and support network, today announced that the
Company leased 3,446 commercial vehicles in the second quarter of
2011, compared to 4,130 in the second quarter of 2010. Since
launching its commercial vehicle sales and leasing business in
March 2008, the Company has leased over 27,000 trucks.
During the second quarter of 2011, the Company opened 36 new
commercial vehicle financing and service centers in the Anhui,
Fujian, Gansu, Guangdong, Guizhou, Henan, Hubei, Hunan, Jiangsu,
Jiangxi, Liaoning, Shanxi, Sichuan, and Zhejiang provinces, and the
Inner Mongolia autonomous region. As of June 30, 2011, the Company
operated 354 commercial vehicle financing and service centers,
compared to 193 as of June 30, 2010.
Company Closes on New Credit Facility
The Company also announced that it recently closed on a new
credit facility from existing lender CITIC Bank, a wholly owned
subsidiary of China International Trust and Investment Corporation
(“CITIC”). The facility provides AutoChina with access to
additional lending totaling up to RMB65 million (approximately
$10.1 million).
Mr. Yong Hui Li, Chairman and Chief Executive Officer,
commented, “We are pleased to continue our partnership with CITIC
with this new credit facility, which will provide us with funding
to further expand the Company’s commercial truck leasing business.
We have worked with CITIC since September 2009 and feel that our
ongoing association with the firm is a testament to the strength
and integrity of AutoChina’s business and management team. We have
also been very pleased with the results of the pioneering
securitization program through CITIC that we announced last year,
which provides us with an additional source of funding. We expect
to continue leveraging our partnerships and our expanding
geographic footprint to continue distinguishing ourselves from our
competitors, who are generally much smaller in size. We believe
that we have built a strong foundation that can serve as a platform
for long-term growth.”
Update on Potential Restatement
As announced on June 30, 2011, AutoChina is appealing the OCA’s
decision that the Earn-out Provision, which was part of its initial
business combination in 2009, be treated as a derivative financial
instrument. The appeals process is ongoing and has not yet
concluded.
The Company believes it is appropriate to wait until the appeals
process has concluded before filing its audited financial results
for the year ended December 31, 2010. AutoChina is working closely
with its advisors, legal counsel, PricewaterhouseCoopers Zhong Tian
CPAs Limited Company, and Crowe Horwath LLP to expeditiously
resolve the appeals process and to prepare the necessary documents
should the Company be required to restate its previously reported
financial statements.
Mr. Li concluded, “We continue to work closely with all
appropriate parties on this potential restatement, which focuses on
the Earn-out and is not expected to negatively affect AutoChina’s
operations. We will keep our existing shareholders, analysts, and
potential investors apprised of our progress in filing our Form
20-F.”
Update on SEC Investigation
As announced on June 30, 2011, the Company is being investigated
by the SEC. This investigation began independently of the Company
voluntarily bringing any accounting matters to the attention of the
OCA, and the OCA process did not trigger the SEC investigation. The
SEC has informed AutoChina that the investigation is a non-public,
fact finding inquiry and does not mean that the SEC has concluded
that AutoChina has committed any wrongdoing.
AutoChina voluntarily disclosed the existence of the SEC inquiry
on June 30, 2011. The Company continues to fully cooperate with SEC
staff regarding their investigation.
About AutoChina International Limited:
AutoChina International Limited is China’s largest commercial
vehicle sales, servicing, leasing, and support network. AutoChina’s
operating subsidiary was founded in 2005 by nationally recognized
Chairman and CEO, Yong Hui Li. The Company owns and operates 354
commercial vehicle financing centers across China and primarily
provides sales-type leasing and support services for local
customers. The Company’s website is
http://www.autochinaintl.com.
Safe Harbor Statement:
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
about the Company. Forward-looking statements are statements that
are not historical facts. Such forward-looking statements, based
upon the current beliefs and expectations of the Company's
management, are subject to risks and uncertainties, which could
cause actual results to differ from the forward-looking statements.
The following factors, among others, could cause actual results to
meaningfully differ from those set forth in the forward-looking
statements:
- Continued compliance with government
regulations;
- Changing legislation or regulatory
environments;
- Requirements or changes affecting the
businesses in which the Company is engaged;
- Industry trends, including factors
affecting supply and demand;
- Labor and personnel relations;
- Credit risks affecting the Company's
revenue and profitability;
- Changes in the commercial vehicle
industry;
- The Company’s ability to effectively
manage its growth, including implementing effective controls and
procedures and attracting and retaining key management and
personnel;
- Changing interpretations of generally
accepted accounting principles;
- General economic conditions; and
- Other relevant risks detailed in the
Company’s filings with the Securities and Exchange Commission.
The information set forth herein should be read in light of such
risks. The Company does not assume any obligation to update the
information contained in this press release.
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