SANTA ROSA, Calif., Aug. 9, 2012 (GLOBE NEWSWIRE) -- ZAP Jonway (OTCBB:ZAAP) received US$12.7 million in dealership financing from China Everbright Bank at the end of July 2012 to finance the purchase of vehicles for sale at qualified dealerships in China.
The dealership financing obtained by Jonway Auto is for authorized, eligible and approved Jonway Auto dealers in China. It is a new model of financing support that Jonway Auto was able to negotiate with China Everbright Bank after more than 1 year of due diligence. The fund is available for qualified dealers to finance "flooring" of the vehicles purchased to be sold in the dealership. The dealership has to be qualified by China Everbright Bank and the approved amount of loan for that dealership is drawn down based on the value of the orders placed with Jonway Auto. The bank pays Jonway Auto for the orders placed and the dealer repays the bank when the vehicles are sold. The dealer is liable for repayment of the loan as the vehicles are sold over a six month period. Jonway Auto provides the guarantee behind this repayment. This is a revolving credit line that is drawn down and repaid as the vehicles are bought and sold by qualified dealers. The overall amount available could increase as the business of each dealership grows.
"With the tightening of credit availability from banks worldwide, we are pleased with the support of this credit facility for our qualified dealers," said Alex Wang, Co-CEO of ZAP Jonway and CEO of Jonway Auto. "Starting now we will be able to begin offering in aggregate a total of 80 million RMB (USD$12.7 million) to our dealerships. We believe that this is a very important and valuable support we are giving to our qualified dealers and will encourage them to market and support our products more aggressively."
ZAP Jonway CFO Benjamin Zhu added: "We are one of the few smaller auto manufacturers to receive this kind of financial support from a large Chinese Bank. We appreciate the support we received from China Everbright Bank and know that this will be a long-term partnership in supporting our dealership network expansion and growth. We have in the past always received upfront direct payment from dealerships. But now with this bank financing credit available to our qualified dealers that have good credit ratings, these dealers can expand their sales and sub-dealership networks, thus supporting their growth."
China Everbright Limited (SEHK: 165) is a financial services company in asset management, direct investment, brokerage and investment banking in the Greater China region, including Mainland China and Hong Kong. It is parented by China Everbright Group, a state-owned enterprise operated under the supervision of the State Council of the People's Republic of China. China Everbright Holding Company Limited was established in Hong Kong in 1983. It then acquired several listed companies and restructured to form China Everbright Limited (SEHK: 165) and China Everbright International Limited (SEHK: 257). China Everbright Limited was listed on the Hong Kong Stock Exchange in 1997.
ZAP Jonway is a pioneer in advanced technology vehicles, combining the attributes of ZAP and Jonway Automobile to design and manufacture quality, affordable gasoline and new energy electric vehicles (EVs). ZAP Jonway is headquartered in Santa Rosa, California and its production facility is located in Zhejiang Province of the People's Republic of China. Additional information about ZAP Jonway is available at http://www.zapworld.com.
The ZAP Jonway logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10607
Forward-Looking Statements
This press release contains forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of ZAP's products, increased levels of competition, new products and technological changes, ZAP's dependence upon third-party suppliers, intellectual property rights and other risks detailed from time to time in ZAP's periodic reports filed with the Securities and Exchange Commission