Attached files
| file | filename |
|---|---|
| 8-K - CHINA ELECTRIC MOTOR, INC. | v207449_8k.htm |
| EX-10.1 - CHINA ELECTRIC MOTOR, INC. | v207449_ex10-1.htm |
China
Electric Motor, Inc. Announces Agreement to
Purchase
“Sunna Industrial Park” Land and Production Facilities
SHENZHEN,
China, January 6, 2011 /PRNewswire-Asia-FirstCall/ -- China Electric Motor, Inc.
(Nasdaq: CELM, “China Electric” or the “Company”), a Delaware corporation and
China-based company that engages in the design, production, marketing and sale
of micro motor products, today announced that its indirect wholly owned
subsidiary, Shenzhen YuePengCheng Motor Co., Ltd. (“YuePengCheng”), entered into
a Property Purchase Agreement (the “Agreement”) with Shenzhen Jianhuilong
Industry Co., Ltd. (“Jianhuilong”) pursuant to which YuePengCheng agreed to
purchase (the “Transaction”) the remainder of the Shenzhen-based “Sunna
Industrial Park” it did not previously own, for approximately RMB170.9 million
(or approximately US$25.8 million). The total amount is expected to be paid in a
series of installments by January 31, 2011. The closing of the Transaction is
expected to take place within 30 days following the date of the Agreement,
subject to government approvals.
Transaction
Details
The
Company, through its indirect wholly owned subsidiary, YuePengCheng entered into
the Agreement with Jianhuilong to purchase certain property located at Sunna
Industrial Park, 2nd Fuyuan Road, Fuyong Hi-Tech Zone, Baoan District, Shenzhen,
the People's Republic of China. The gross floor area of the purchased property
is approximately 35,530 square meters (or approximately 382,442 square feet)
comprised of three production buildings, an office building, a staff dormitory
and a power distribution house. The transaction was independently valued by a
3rd
party China-licensed valuation agent at RMB170.9 million (or approximately
US$25.8 million). The Company has made a down payment and paid a security
deposit of RMB18.4 million (or approximately US$2.8 million), in the aggregate,
with the remaining RMB152.5 million (or approximately US$23.0 million) to be
paid by January 31, 2011, subject to government approvals.
Since
September 2009, China Electric Motor has owned one of the four production
facilities located in Sunna Industrial Park, a 6,337 square meter production
facility. This company-owned facility, not included as part of today’s
transaction, represents approximately 60% of the Company’s current production
capacity, while an additional 20% of the Company’s production
capacity comes from one of the buildings being acquired in this transaction
(the remaining 20% of production capacity is from the Company’s leased facility
in Zhejiang). In total, full ownership of the Sunna Industrial Park will provide
the Company with approximately 25,631 square meters of production capacity in
four separate buildings, an office building (10,612 square meters), a staff
dormitory (5,395 square meters) and a power distribution house (227 square
meters).
Mr. Yue
Wang, Chief Executive Officer of China Electric, stated, “Our recent purchase of
the Sunna Industrial Park facility represents a cost-effective, long-term
investment for China Electric that will increase the stability of our operations
and allow us to better forecast expenses. We believe the purchase of this
facility will also improve overall efficiency as we consolidate existing
operations and future acquisitions into this centralized facility. After a
review of our 2011 budget, and in light of a proposed rental increase of almost
50% for our Sunna Industrial Park leased facility, we determined that purchasing
the entire facility for our current and future production plans was in the best
interest of the Company and the most cost-effective alternative. This facility
will serve as our core production hub and will provide China Electric with
additional production capacity, paving the way for our future expansion
plans.”
Wang
continued, “We expect to fund this transaction through a combination of existing
cash on our balance sheet and cash flow generated from operations in 2011. After
the purchase, we will be able to collateralize the purchased property
if we were to apply for any bank loans to help fund our
operations. We look forward to a more stable manufacturing
environment for our business and believe this acquisition provides us with a
great opportunity to expand our market position and improve the profitability of
our business over time.”
About
China Electric Motor, Inc.
China
Electric Motor, Inc. (Nasdaq: CELM) is a China-based company that engages in the
design, production, marketing and sale of micro motor products through its
subsidiaries, Shenzhen YuePengCheng Motor Co., Ltd. and Ningbo Heng Bang Long
Electrical Equipment Co., Ltd. The Company's products are incorporated into
consumer electronics, automobiles, power tools, toys and household appliances,
and are sold under its “Sunna” brand name. The Company provides micro motor
products that meet the growing demand for efficient, quiet and compact motors
from manufacturers of consumer electronics, automobiles, power tools, toys and
household appliances. China Electric Motor, Inc. sells its products directly to
original equipment manufacturers and to distributors and resellers both
domestically in the People's Republic of China and internationally to customers
in Korea and Hong Kong. The Company's manufacturing facilities are located in
Shenzhen, Guangdong and Ningbo, Zhejiang.
Safe
Harbor Statement
This
press release of China Electric Motor, Inc. (“China Electric,” the “Company,”
“we,” “us” or “our”) contains “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that involve risks, uncertainties and assumptions. All
statements other than statements of historical fact in this press release are
forward-looking statements, including but not limited to, our future financial
condition or results of operation, the completion and expected benefits of
our planned expansion, the ongoing growth in the sales of our products and our
product lines, our access to new markets, our ability to recruit and retain
high-quality employees, the success of our growth strategies and the continuing
growth of the Chinese economy and Chinese exports. These forward-looking
statements are based on management's current expectations, assumptions,
estimates and projections about the Company and the industry in which the
Company operates, but involve a number of unknown risks and uncertainties,
including, without limitation, our ability to sustain our recent profitability
and growth rates, the possibility that we may not meet production demands and
standards at a reasonable cost, increased competition in the micro motor product
market, our ability to develop and sell new products or penetrate new markets,
our ability to timely bring additional production capacity on line, our ability
to maintain and fill order backlog, the success of our strategic investments and
acquisitions, our ability to timely develop new production equipment,
compliance with and changes in the laws and policies of the People's Republic of
China that affect our operations, including its economic policies and other risk
factors detailed in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2009 and in our subsequent reports on Form 10-Q filed with
the Securities and Exchange Commission and available at www.sec.gov. The Company
undertakes no obligation to update forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its expectations,
except as may be required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are reasonable, it
cannot assure you that such expectations will turn out to be correct, and actual
results may differ materially from the anticipated results. You are urged to
consider these factors carefully in evaluating the forward-looking statements
contained herein and are cautioned not to place undue reliance on such
forward-looking statements, which are qualified in their entirety by these
cautionary statements.
Contact
Information:
In
China:
Dexter
Fong, CFO
China
Electric Motor, Inc.
Tel: +86
136 6666 1663
Email:
dexterfong@gmail.com
ICR,
LLC.
Jeremy
Peruski
Tel: +86
10 6583 7508
Email:
Jeremy.peruski@icrinc.com