VANCOUVER, Jan. 5 /CNW/ - Yalian Steel Corporation (TSX-V: YL) ("Yalian" or the "Company") today announced that it has secured a US$4.7 million loan from the Bank of China (Canada).
The loan terminates on December 31, 2011 and carries an interest rate at the prevailing 6-month LIBOR rate (currently 0.43%) plus 1.50% per annum, to be adjusted every 6 months. The loan will be used to fund the construction of the new coating line and the working capital of the Company. Yangzhou Yalian Steel Pipe Co, Ltd., Yalian's wholly-owned subsidiary in China, has executed a guarantee and postponement of claim in favour of the Bank of China (Canada) in order to secure the loan.
The Bank of China is the largest state-owned commercial bank in China and mainly provides financial support to the infrastructure construction in China and the key projects relating to the improvement in the quality of life for the population. Yalian's large diameter longitudinal submerged arc welding pipe (LSAW) project is strongly supported by the national industrial policy, and therefore this loan was quickly approved by the Bank of China.
"Obtaining this loan from the Bank of China allows us to fund the new coating line," stated Edward (Bud) M. Siegel, Jr., Chairman and Acting Chief Executive Officer of Yalian. "This loan also improves our cash flow in 2010 as we begin to ramp up our sales and pipe production activities."
"Yalian's JCOE LSAW pipe is compatible with the requirement of infrastructure development in China - a focus of the Chinese government. The cooperation with Yalian fits well into the Bank of China's strategy of providing solid international financial service to its customers by leveraging our global network. We have strong faith in Yalian's future development, and will keep providing more support for its growth," stated Zhu Guangda, Director of Bank of China (Canada).
About Bank of China
Bank of China is the largest state-owned commercial bank of China. Its businesses cover commercial banking, investment banking and insurance. With nearly a century's history, Bank of China is the most internationalized commercial bank in China, having its network reached out to 27 countries and regions. In terms of tier one capital, it was ranked 18th among the world's top 1,000 banks by The Banker magazine in 2005.
About Yalian Steel Corporation
Yalian Steel Corporation is a British Columbia corporation focused on the production of high quality Longitudinally Submerged Arc Welded (LSAW) steel pipe to service Asia's rapidly growing energy transportation infrastructure market. The Company has recently completed construction of its initial manufacturing facility in city of Yangzhou, in the Jiangsu province of China. The first production line has a capacity of up to 200,000 metric tons per year. The Yangzhou Yalian plant utilizes the JCOE (J-ing, C-ing, O-ing, Expanding) process, an advanced method of LSAW pipe production that involves the bending and shaping of X-80 grade steel.
For further company information please access our website: www.yaliansteel.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Yalian's business are more fully discussed in the Company's disclosure materials filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars unless noted otherwise.
SOURCE YALIAN STEEL CORPORATION
For further information: For further information: YALIAN STEEL CORPORATION, George Dorin, Acting Chief Financial Officer, Tel. No.: (604) 696-6388