(By Balaseshan) Jinpan International Ltd. (NASDAQ:JST), a China-based maker of cast resin transformers, said it has secured two credit lines from the Bank of Communications totaling about $55 million to develop its new manufacturing facility in Guilin.
The credit lines include a long term credit line for fixed asset investment and a short term credit line for working capital.
Jinpan's Chief Executive Zhiyuan Li said obtaining funding further validates the company's attractive long term growth outlook and strong operating model.
The fixed asset credit line is in the amount of about $33 million and carries an interest rate of People's Bank of China Bench Mark Rate x 1.05 per annum.
Loans made under the fixed asset credit line must be applied to fixed asset investment at the company's Guilin facility. The credit line has a term of seven years. Repayment of loan principal is scheduled over a seven year period, from 2013 to 2019.
The working capital credit line is in the amount of RMB 140 million (approximately US$ 22 million) and carries an interest rate of People's Bank of China Bench Mark Rate x 1.05 per annum.
Loans made under working capital credit line must be applied to the working capital of the company's Guilin facility. The credit line has a term of two years. The loan principal must be repaid in full annually.
The credit lines will provide significant support to the company's business expansion in a non-dilutive manner to its shareholders. With a financial flexibility of credit lines and a healthy backlog, the company remains comfortable with its long-term growth strategies.
Jinpan is engaged in the design and manufacture of cast resin transformers, switchgears, unit substations, reactors and other wind energy products. The cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations in lower, more usable voltages and are used in a range of industrial, infrastructure, commercial and residential applications.
JST closed Wednesday's regular session down 4.56% at $7.32. The stock has been trading between $6.75 and $12.71 for the past 52 weeks.