KUWAIT, Feb. 26 /PRNewswire-FirstCall/ -- China Agro-Technology Ltd., (OTC Bulletin Board: CAGTF), a leader in agricultural genetic engineering, today announced that it has secured approval in principal for loan financing of three tranches of US$100 million each. The financing will be used to fund biological asset acquisitions, plantation management/operations, the expansion of crushing plants, and the establishment of increased storage facilities & bio-diesel refineries into the foreseeable future.
With projected global demand for Crude Jatropha Oil ("CJO") as one of the preferred choices over other out-priced edible vegetable oil feedstocks, the refining of CJO for bio-diesel production forms one of the fundamental building blocks in CAT's expansion strategy. The Company seeks to derive strong profits from the application of agro-technology enhancements in scaling nurseries to support sustained plantation growth with modern management systems. With access to affordable financing in support of this aggressive plan, CAT will be better able to focus on its core competencies of meeting the global demand for bio-diesel products.
Dr. Harry He, Founder and Chairman of CAT, said, "CAT's global vision is just beginning to take shape with this initiative into the Middle East and this endorsement cannot be more significant. Combined with our recent engagements in the US and Europe as well as our business focus in Asia, CAT is in a solid position to realize our global vision sooner rather than later."
YT Lee, CAT Senior Advisor, noted, "The numerous years of self-funding and sustenance by the Company are just beginning to pay off. With the intended market leadership of CJO production clearly in CAT's sights after the recent plantation acquisitions in Indonesia, the significance of this financing access cannot be downplayed. As a China-centric concern with a deep Asian heritage, it was difficult not to conveniently access the huge pool of funds readily available in Asia. It was important to forge a new link with one of the most significant growth regions for capital sourcing and funding in the world." After several attempts at pre-listing and mezzanine fundraising involving numerous global funds, financial institutions, and investment banks, Mr. Lee added, "The business and financial discipline gained from these prior engagements with some of the top global institutions have been invaluable. The fact that we have endorsements in our business models and processes speaks volumes and made these past efforts worth the while as we are now readily 'bankable'".
Mr. Jalil Al-Saidi, Chairman & CEO of AL Manarah Investment, said, "It is relatively easy to seek funding and financing for good and profitable companies, but working with CAT has been a real pleasure. Not only do the excellent business model and numbers speaks for themselves but the more pressing social and environmental issues and concerns are clearly taken care of responsibly. It is no wonder that we have received such resounding subscriptions to this financing initiative with more support to come for CAT's future needs. This financial endorsement goes beyond existing good management, business plans and bottom line, but is an investment decision for the future as we truly believe in the well designed and sustainable structure put in place and executed by CAT in a choice sector with extreme growth potential". AL Manarah Investment is the consortium consultant responsible for arranging the initial investment tranche of US$100 million with equity participation in CAT, as well as further initiative in extending the additional three US$100 million tranches of loan financing packages for CAT to fund the various biological asset acquisitions made by the Company.
Mr. Amin N. Habib, Director and Middle East spokesman for CAT noted, "CAT is uniquely positioned to benefit from the acute global shortages of resource feed-stocks. Working from its superior agro-technology position, the Company can grow to be a formidable force and significant player in the upstream space of this important value chain."
About Jatropha
Jatropha is an economically efficient feedstock for the production of biodiesel. Since the plant grows in the wild easily, much less care is needed in cultivating the tree than traditional sources of bio-feedstock such as palm oil and corn. The productive period of Jatropha trees range between 15 to 20 years. Over the years, CAT has developed new strains of Jatropha that not only grow to maturity in a shorter than period of time but also give seed yield that is a strong multiple of trees planted by other growers. Jatropha trees produce seeds containing up to 40% oil; when the seeds are crushed and processed, the resulting oil can be used in a standard diesel engine, while the residue can be processed into biomass to power electricity plants. The by-products are often cited as a clean, green and prime source for global biodiesel supply.
About China Agro-Technology Holdings, Ltd
China Agro-Technology Holdings, Ltd ("CAT") is an ecologically sustainable agricultural technology enterprise that aims at promoting a global reforestation program, generating environmental rehabilitation and serving the acute demands for resource products. CAT is principally engaged in the ecological forestry business and agricultural technology, producer and sale of quality seeds and marketing of agro-technology know-how. The Company's Directors consider the acquisition of the new land bank to be a significant addition to the Company's biological assets. With the planting of Jatropha, CAT will broaden its revenue sources and increase its role in the biodiesel markets and "going green" efforts. On the latter, CAT believes that partnering countries could leverage on its genetic engineering plantation technologies to maximize agriculture outputs and generate economies of scale while promoting an ecologically sustainable land environment.
CAT is primarily involved in the ownership, management and operation of Genetically Engineered plantations, the non-tube clone plantations and the marketing of the proprietary rights and technological know-how to the global market. CAT had total revenues of $37 million in the fiscal year ended September 30, 2007, with gross profit of $35 million and net income of $32.8 million. CAT's strength is its group of highly innovative research scientists and agronomists who specialize in the R&D of agriculture and intelligent computer non-tube plant propagation technology. Driven by agro-biotechnology, CAT is able to achieve higher output with a shorter growth period. CAT's Genetically Engineered Eucalypt Trees (GEET) strains are suitable for cultivation at different climatic conditions and are able to grow within just 4-5 years time to a height of 35 to 40 meters, as compared to other species that take about 6 to 8 years. The Company's trees also yield 50% more in wood timber, about 150 cubic meters per hectare as compared to 100 cubic meters per hectare for those which currently leads the world in eucalyptus production. Other unique features of CAT's GEETs include increased resistance against pests and weeds, the ability to flourish under adverse weather and soil conditions, reduced usage of agro-chemical and growth of at least 8 rotations over a period of 50 years without the need for replanting of new saplings.
Safe Harbor Statement: Under The Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results, performance and achievement in the future to differ materially from forecasted results, performance, and achievement. These risks and uncertainties are described in the Company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in the Company's plans or expectation.
Contact:
Ashley Hull
ProPublic Media
(310) 450-9100
China Agro-Technology Ltd.
