China ACM Pays off Short Term Loan and Reduces Receivables
03 August 2009 - 9:30PM
PR Newswire (US)
NEW YORK and BEIJING, Aug. 3 /PRNewswire-FirstCall/ -- China
Advanced Construction Materials Group, Inc. ("China ACM")
(OTC:CADC) (BULLETIN BOARD: CADC) , a leading provider of ready-mix
concrete and related services in China, today announced that it has
paid off its $4.4 million short-term loan, which carried an
interest rate of 15%. Additionally, the company has significantly
reduced its long-term receivables as of June 30, 2009. The company
transferred approximately $5.7 million of its receivables as a
method of payment for equipment and other asset purchases,
transferred $3.5 million of receivables for future lease payments,
and factored approximately $4.1 million of additional receivables.
The company also announced that on July 28, 2009 it issued
approximately 651,000 shares of common stock at $2.30 per share to
certain employees and associates of the company, partially in lieu
of equity-based compensation, resulting in gross proceeds of
approximately $1.5 million. Mr. Xianfu Han, Chairman and Chief
Executive Officer, stated, "We continue to generate strong cash
flow and reduce our long-term receivables, which has allowed us to
pay down our short term loan and significantly enhance our balance
sheet. By eliminating the interest payments on our short term loan,
we expect to save approximately $600,000 per year. However, it is
important to note that as we continue to expand our infrastructure
and add capacity, we may utilize either short or long-term debt in
order to minimize shareholder dilution. Most of our receivables are
derived directly from government entities, which are extremely
credible within the People's Republic of China. As a result, we are
able to transfer the rights to these receivables as a method of
payment for the purchase of equipment and goods at fair market
value, as well pre-pay future lease expenses. We also completed a
small capital raise among certain employees and associates of the
company in China. This allowed us to quickly and cost effectively
raise capital to accelerate our expansion, while incentivizing
employees and strategic partners that participated. We were quite
pleased with the terms of the transaction, which incurred no
transaction fees and were negotiated and agreed upon in early July
2009, while the average share price was well below current levels."
About China ACM China ACM, founded in 2002 and based in Beijing,
China, is a leading producer of advanced construction materials for
large scale commercial, residential, and infrastructure
developments. The company is primarily focused on producing and
supplying a wide range of advanced ready-mix concrete materials for
highly technical, large scale, and environmental construction
projects. The company also aims to develop and produce new and
innovative environmentally conscious construction materials. China
ACM provides materials and services through its seven ready-mix
concrete plant network covering Beijing metropolitan area. China
ACM owns one plant, leases two plants and has technical services
and preferred procurement agreements with four other
independently-owned plants. China ACM is ISO 9001 (product
quality), ISO 14001 (environmental safety), and ISO 18001
(employment environment safety) certified. Additional information
about the company is available at http://www.china-acm.com/. This
press release contains "forward-looking statements" within the
meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that could cause the
actual results of the Company to differ materially from the results
expressed or implied by such statements, including changes from
anticipated levels of sales, future national or regional economic
and competitive and regulatory conditions, changes in relationships
with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer
acceptance of existing and new products, and other factors.
Additional Information regarding risks can be found in the
Company's Annual Report on Form 10K and in the Company's recent
report on Form 8K filed with the SEC. Accordingly, although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The
Company has no obligation to update the forward-looking information
contained in this press release. Contact: Crescendo Communications,
LLC David Waldman or Klea Theoharis Tel: (212) 671-1020 Email: Web:
http://www.china-acm.com/ DATASOURCE: China Advanced Construction
Materials Group, Inc. CONTACT: David Waldman, or Klea Theoharis,
both of Crescendo Communications, LLC, +1-212-671-1020, Web Site:
http://www.china-acm.com/
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