TORONTO, Nov. 16, 2018 /CNW/ - Boyuan Construction Group, Inc., (TSX: BOY) ("Boyuan" or the "Company") today provided further update on the delays it is experiencing for transferring funds from its banking partners in China with respect to the redemption of the Company's 11.5% unsecured convertible debentures due on October 31, 2018 (the "Unsecured Debentures"). The Company confirms that it has received a notice of default from the trustee for the Unsecured Debentures.
The Company has obtained a letter from one branch of Industrial and Commerce Bank of China ("ICBC") addressed to the Company's wholly-owned subsidiary that the Chinese operating entity controlled by the Company, Zhejiang Boyuan Construction Co., Ltd. ("Boyuan China") has deposit at the bank of approximately RMB¥33.34 million. The Company also provided a screenshot of a bank account of Boyuan China held at another branch of ICBC with approximately RMB¥7.19 million. Copies of the bank confirmation letter and account screen shot are available on SEDAR under the Company's profile. The total deposits are approximately RMB¥40.57 million, equivalent to approximately C$7.54 million based on HSBC Canada buying rate of November 15, 2018, exceeding the amount needed to redeem the debentures in full. The Company also confirms that it will be paying its debenture holders the additional interest accrued since October 31, 2018.
"China continues to maintain a strict foreign exchange control system that regulates funds flowing out of the country," said Paul Law, Chief Financial Officer of Boyuan Construction. "The state discourages capital outflow by demanding banks to strengthen the examination on documents and certificates, and to standardize the forex management. In the case of our planned remittance to redeem our unsecured debentures, the foreign control regulators and our banks insisted that the tax department issue a 'clearance letter' before the banks can remit our funds out. The requirement for a clearance letter was never enforced when we remitted funds in the past. We are working with the parties to resolve as quickly as possible."
About Boyuan Construction Group, Inc.
Backed by a longstanding track record, Boyuan Construction Group, Inc. ("Boyuan" or the "Company") has the knowledge and expertise to design and build a wide range of commercial and residential developments, as well as municipal infrastructure and engineering projects. Based in Jiaxing City and with a growing presence in both Zhejiang Province and Hainan Province, Boyuan focuses on construction projects in China's fast-growing regions of the Yangtze River Delta and the Hainan Province. The Company's current project backlog includes residential, commercial, industrial and mixed-use developments. For more information visit www.boyuangroup.com.
Caution Regarding Forward-Looking Information:
Certain information contained in this news release constitutes forward-looking information, which is information relating to future events or the Company's future performance and which is inherently uncertain. All information other than statements of historical fact may be forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook. Forward-looking information contained in this news release includes, but is not limited to, management's expectation to proceed with the redemption. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and readers are cautioned not to place undue reliance on forward-looking information contained in this news release. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking information contained in this news release include, but are not limited to: political and economic conditions in China and other risks included in the Company's AIF for the fiscal year ended June 30, 2018 and in the Company's public disclosure documents filed with certain Canadian securities regulatory authorities and available at www.sedar.com. The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as otherwise required by law.
SOURCE Boyuan Construction Group, Inc.