Attached files
| file | filename |
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| 8-K - Celestial Delights USA Corp. | v194707_8k.htm |
| EX-10.1 - Celestial Delights USA Corp. | v194707_ex10-1.htm |
EXHIBIT
99.1
FAR
EAST WIND POWER COMPLETES NEGOTIATION FOR CONTROLLING POSITION OF WIND FARM
DEVELOPMENT IN YUNNAN, CHINA
Thursday, August 19, 2010 | OTCBB: FEWP
BEIJING — Far East Wind Power Corp.
(OTCBB: FEWP) ("Far East" or the "Company") has entered into a
binding Letter of Intent ("LOI") with Taitong Energy Limited (the "Taitong") in
order to acquire certain rights to a wind farm located in Yunnan Province of the
People's Republic of China ("Yunnan").
James
Crane, Chief Financial Officer, stated, "We came to terms with the
representatives from Taitong and will move forward with Taitong immediately.
Taitong's wind farm development is at a later stage than our previously
announced wind farm development in Ningxia. Our business model is scalable and
potentially could be extremely profitable due to unique market conditions in
China. We are taking advantage of a niche marketplace in China. Chinese
state-owned enterprises are developing wind farms but there is not enough
development to meet China's stated renewable energy goals and many entrepreneurs
in China are now aware of the value a wind farm can create and are attempting to
enter the wind farm marketplace themselves. The issues these entrepreneurs face
invariably revolve around start-up financing, of which these entrepreneurs
generally do not have access to unless wind farm assets are already in place. We
are working with these entrepreneurs to provide them with capital and refine
their business plans so that as partners we can develop wind farms that will
generate substantial cashflow for each partner for many years to
come."
Highlights of the LOI are as
follows:
— FEWP
will fund up to $20.0 million for development, agreement with Taitong that FEWP
will be repaid if and once the wind farm receives financing from a PRC
bank
—
Commitment from Taitong to execute business plan and work to obtain all
necessary remaining permitting and authorizations for the wind farm, and secure
low interest rate bank debt financing of up to $80.0 million
— FEWP's
ownership interest in the wind farm, to be structured as a sino-foreign joint
venture (the "JV"), will be 49%, Taitong will own 51%
— FEWP
will consolidate all assets, liabilities and results operations under applicable
accounting principles due to specific control provisions negotiated into the LOI
by FEWP
— A
monthly dividend distribution plan is agreed to whereby the maximum allowable
dividend is distributed to FEWP and Taitong based on ownership
percentages
— Initial
plans are for development of a 49.5 megawatt wind farm with installed capacity
to potentially generate $11.8 million in revenues on an annualized basis if
fully utilized
— FEWP
obtained a right of first refusal on remaining 99 megawatt ("MW") preliminarily
approved wind farms controlled by Taitong in Yunnan. If all 148.5 MW are
developed in Yunnan, potential revenue from the Yunnan wind farms are projected
to total $34.4 million in revenue on an annualized basis if fully
utilized.
The Wind Farm Industry in
China:
In
December 2009, revisions to China's original 2005 renewable energy law were
adopted by the National People's Congress and were effective on April 1, 2010.
The revisions contained three main provisions:
1. The
renewable energy law was strengthened to guarantee that electric utilities
purchase all renewable power generated, including wind farm-generated
electricity. Previously, utilities were only obligated to purchase renewable
energy if there was sufficient power demand on the electrical grid. Now,
utilities must buy the power in any circumstance. The revisions to the law also
add deadlines and economic penalties for utilities failing to comply with this
guaranteed-purchase requirement.
2. The
requirement for detailed planning and coordination, including coordination of
renewable energy with overall electric power sector development and transmission
planning, coordination of local, provincial and national level development
plans. Additionally, the roles and responsibilities of the five main electric
power companies are to be redefined in relation to electrical grid
interconnection of renewable energy generators such that the five main electric
power companies are responsible for assisting with the development of renewable
energy. The law revisions also address topics such as energy storage and smart
grids.
The
grid-related provisions included in the December 2009 legislative revisions were
as a result of the fact that the renewables sector has been growing so fast,
especially wind power. In the past few years the growth of wind power in China
has been so significant that transmission planning and interconnection of the
Chinese electric grid was falling and electrical power generated through wind
farms was being lost before being transmitted to the electrical
grid.
3. The
revisions to the renewable energy law also strengthened a renewable energy fund
under the Ministry of Finance. Previously, this fund was collecting a
$0.06/kilowatt hour surcharge on electric power sales on a nation-wide basis
(some customers still remain exempt from the surcharge). The Ministry of Finance
applies those funds to the costs of government-supported renewable energy
projects and the costs of grid connections. However, thus farm the surcharge has
not been enough, so the new revisions allow the Ministry of Finance to
supplement the renewable energy fund from general revenues.
Many other energy policy changes have
also occurred recently:
1. China
has instituted a target of 15% for renewable energy and non-fossil fuel sources
of electricity share of all final energy consumption by 2020.
2. In
December 2009, China announced that it would reduce the carbon intensity of its
Gross Domestic Product by 40%-45% by 2020, relative to 2005 intensity
levels.
3. China
also recently instituted a three year tax holiday from local and provincial tax
for renewable energy projects. Subsequent to the tax holiday, the tax rate will
be 12.5% for three years, and 25% thereafter.
Additional
information will be available shortly on the Far East Wind Power website at:
www.fareastwind.com.
The
Definitive Agreement shall contain customary representation and warranties,
covenants and indemnification provisions. Details of the company's business,
finances, appointments and agreements can be found as part of the Company's
continuous public disclosure as a reporting issuer under the Securities Exchange
Act of 1934 filed with the Securities and Exchange Commission's ("SEC") EDGAR
database.
About Far East Wind Power Corp.
(OTCBB: FEWP)
Far East
Wind Power Corp. aims to generate clean and profitable energy in one of the
world's fastest growing energy sectors through access to a portfolio of
utility-class wind power development projects. Far East will inject innovation
to drive cost out of turbine manufacturing, introduce new technologies and
strategic relationships, and aggressively pursue all available low costs of
capital to deliver the most competitive cost per capacity and highest rates of
return in the Asian marketplace. For more information, visit:
www.fareastwind.com.
Notice Regarding Forward-Looking
Statements
This news
release contains "forward-looking statements" as that term is defined in Section
27A of the United States Securities Act of 1933, as amended and Section 21E of
the Securities Exchange Act of 1934, as amended. Statements in this press
release which are not purely historical are forward-looking statements and
include any statements regarding beliefs, plans, expectations or intentions
regarding the future. Such forward-looking statements include, among other
things, regulatory incentives, the development of new business opportunities,
and projected costs, revenue, profits and results operations. Actual results
could differ from those projected in any forward-looking statements due to
numerous factors. Such factors include, among others, the inherent uncertainties
associated with new projects and development stage companies. These
forward-looking statements are made as of the date of this news release, and we
assume no obligation to update the forward-looking statements, or to update the
reasons why actual results could differ from those projected in the
forward-looking statements. Although we believe that any beliefs, plans,
expectations and intentions contained in this press release are reasonable,
there can be no assurance that any such beliefs, plans, expectations or
intentions will prove to be accurate. Investors should consult all of the
information set forth herein and should also refer to the risk factors
disclosure outlined in our annual report on Form 10-K for the most recent fiscal
year, our quarterly reports on Form 10-Q and other periodic reports filed from
time-to-time with the Securities and Exchange Commission.