WUJIANG, CHINA -- (Marketwired) -- 01/15/14 -- China Commercial Credit, Inc. (NASDAQ: CCCR), a microfinance company whose major business is providing microcredit loans and loan guarantees to small-to-medium enterprises (SMEs), farmers and individuals in Jiangsu Province, today reported it had filed a Registration Statement for a follow on offering of its common stock.
The net proceeds will be utilized for the capitalization of Pride Financial Leasing (Suzhon) Co. Ltd., the company's wholly-owned subsidiary that will offer mid-to long-term leases on industrial machinery and equipment, transportation vehicles, and medical devices to SMEs, hospitals, municipal governments and public transportation entities.
Pride is expected to commence its leasing business immediately upon the close of this offering for which Axiom Capital Management Inc. is acting as sole book running manager and ViewTrade Securities, Inc. and Newport Coast Securities Inc. are acting as co-managers. In addition to the offering proceeds, the Company initially plans to borrow funds equal to three to four times its registered capital utilizing traditional bank loans. Further, Pride's charter with Jiangsu Province gives the company the flexibility to expand this leverage up to nine times registered capital to finance its leases.
As one of a handful of equipment leasing companies in Jiangsu Province, Pride will seek to capitalize on the accelerating demand for leased machinery, equipment and vehicles from government and private entities and CCCR anticipates there will be "strong demand" for leasing these assets, and under terms highly attractive to Pride. Many of the initial lessees are expected to be existing direct loan customers of CCCR.
The company said it expects to benefit from the explosive growth being experienced across the entire financial leasing industry. According to the 2013 China Financial Leasing Industry Report, last year saw the industry grow to about $250 billion with more than 560 financial leasing companies in operation, up from $150 billion and about 300 financial leasing companies in operation at the end of 2011.
Despite this growth, added CCCR, in China only five percent of companies requiring the use of industrial machinery and equipment utilize financial leasing of these assets, compared to about 20 percent in the European and American markets. Based upon current growth patterns -- and recently announced government infrastructure development plans which should significantly increase demand for leased machinery, equipment and vehicles -- it is expected that the nation's financial leasing industry could grow at a compounded annual growth rate of up to 30 percent, and exceed $1.59 trillion by 2020.
CCCR said it will also benefit from special income tax relief whereby Pride will be exempted from provincial income tax for its first five years, followed by a period of five years during which Pride's income tax rate will be 50 percent of the prevailing provincial income tax rate.
Lastly, said CCCR, many Chinese businesses have begun to recognize the benefit of leasing versus purchasing and understand that leasing will likely minimize significant upfront costs, maximize tax allowances, and effectively boost their productive assets without creating the need to provide any additional guarantee and other collateral typically required for bank loans. Leasing may also preserve a company's existing bank credit lines, resulting in lower cash outflows.
The company said it expects these factors should enable Pride to make a "significant contribution" to CCCR's top and bottom line growth going forward.
Pride will be led by CCCR's founder, CEO and Chairman, Mr. Huichun Qin, a former vice president at the Wujiang branch of Peoples Bank of China and former deputy director of the State Foreign Exchange. Mr. Qin will be assisted by an expert management team including General Manager Mr. Baisheng Zhao, who headed CCCR's risk management department from February 2009 to August 2013 and previously served as president of Wujiang Rural Commercial Bank and headed the credit department at Wujiang Rural Cooperative Credit Union; Business Development Manager Mr. Naibing Ji, who previously worked for ten years in the Suzhou and Wujiang branches of the Property Insurance Department at China Life Insurance; and Risk Manager Mrs. Jue Song, the former risk department manager at the Beijing Gold Exchange Center.
"We are very optimistic about Pride's prospects," said Mr. Qin. "Due to China Commercial Credit's strong relationships with hundreds of existing loan and loan guarantee clients, our experience in locating and evaluating new clients, and the rapidly exploding demand for equipment leasing services in Jiangsu Province and beyond, we anticipate that Pride will become a great contributor to the growth and profitability of China Commercial Credit."
A registration statement relating to this offering has been filed with the Securities and Exchange Commission on January 15, 2014 but has not yet been declared effective by the Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell nor the solicitation of an offer to buy any securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
This offering will be made only by means of prospectus, copies of which may be obtained, when available, from Axiom Capital Management, Inc., Attention: Prospectus Department, 780 Third Avenue, 43rd Floor, New York, NY 10017, Telephone: (212) 521-3800.
About China Commercial Credit
China Commercial Credit (http://www.chinacommercialcredit.com), founded in 2008, provides business loans and loan guarantee services to more than 360 small-to-medium enterprises (SMEs), farmers and individuals in China's Jiangsu Province. Due to recent legislation and banking reform in China, these SMEs, farmers and individuals -- which historically had been excluded from borrowing funds from State-owned and commercial banks -- are now able to borrow money at competitive rates from microfinance lenders. According to 2012 data, SMEs, farmers and individuals account for eight of ten jobs in China and comprise 60 percent of the nation's GDP.
Investors wishing to receive CCC's corporate communications as they become available may go to http://www.ir-site.com/china-commercial-credit/default.asp and register under Email Alerts. The company's blog, "From The CEO," also appears at the same site. Each new blog post will be announced on the company's Twitter account, @CCCR_update, where readers may link directly to the post.
This press release contains forward-looking statements within the meaning of United States securities laws. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations. You should review the factors described in the section entitled "Risk Factors" in our prospectus filed with the SEC on August 14, 2013 and other documents we file from time to time with the SEC. We qualify all of our forward-looking statements by these cautionary statements.
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