BEIJING, Jan. 20 /PRNewswire-Asia-FirstCall/ -- Sinoenergy Corporation
(Nasdaq: SNEN) ("Sinoenergy" or the "Company"), developer and operator of
retail Compressed Natural Gas (CNG) filling stations in the People's Republic
of China, and a manufacturer of CNG transport truck trailer, CNG filling
station equipment and CNG fuel conversion kits for automobiles, today
announced its majority-owned subsidiary, Qingdao Sinogas General Machinery Co.
Ltd. ("Qingdao Sinogas"), has received payment of RMB16 million ($2.4 million)
by one of its major customers, Wuhan Green Energy Natural Gas Transport Co.
Ltd. ("Wuhan Green Energy"), on December 31, 2008 for the purchase of CNG
truck trailers. Wuhan Green Energy financed this payment of RMB16 million by
arrangement with a China-based financial leasing company.
Due to competitive market pressures in this period of financial
uncertainties, Qingdao Sinogas, the majority-owned subsidiary of Sinoenergy,
extended very favorable payment terms on receivables for some major strategic
customers for purchases of CNG equipment including CNG truck trailers during
2008, which resulted in Sinoenergy's large increase in accounts receivable.
The RMB16 million received significantly reduces the Company's outstanding
accounts receivable.
Sinoenergy has taken proactive measures to reduce the Company's accounts
receivable. As part of this effort, the Company has made requests to its major
customers to take immediate and relevant steps to accelerate the payment of
receivables and shorten the payments terms. The Company's efforts to improve
cash flow and reduce its accounts receivable and shorten the payment terms has
been helped by the multitude of alternative financing plans made available
through the stimulus incentives offered by the central government.
The different alternative financing options include but are not limited to
the following:
A. Different permutations of buy-and-lease scenarios where a financial
institution takes ownership of the assets, leasing the equipment to the end
user or another intermediary. The advantage of this leasing arrangement is
that the CNG transport company will be better able to cope with payment terms;
B. Mortgaging the equipment by which the CNG transport companies can
obtain special mortgage financing from local banks to purchase truck trailers
from Qingdao Sinogas with payment of principal amount and interests on a
monthly basis to the banks;
C. The transport companies can secure special purpose business loans from
local banks which enable financial settlements to be made directly with
Qingdao Sinogas.
"The objective of the Chinese government's RMB4 trillion economic
stimulus plan is to encourage domestic consumption and to stimulate the
economy. Clean energy and alternative fuel initiatives are beneficiaries of
this stimulus plan. Therefore, CNG industry is strongly supported by financial
and credit institutions, thus allowing for the accelerated implementation of
financing plans for natural gas transport companies." Bo Huang, CEO of
Sinoenergy said, "We will continue to push our major customers to secure
alternative financing through different channels and we will be working
diligently to reduce the level of accounts receivable systematically and step
by step in the upcoming 3 fiscal quarters. Sinoenergy fully intends, to the
best of our abilities, to reduce our financial exposure in these difficult
times, and to continuously improve our balance sheet."
About Sinoenergy
Sinoenergy is a developer and operator of retail CNG stations as well as a
manufacturer of compressed natural gas (CNG) transport truck trailers, CNG
station equipment, and natural gas fuel conversion kits for automobiles, in
China. In addition to its CNG related products and services, the Company
designs and manufactures a wide variety of customized pressure containers for
use in the petroleum and chemical industries.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact in this
announcement are forward-looking statements, including but not limited to,
future changes in the wholesale and retail price for CNG for vehicles in China;
changes in policy by the national, provincial and municipal government of the
PRC regarding CNG prices, the CNG vehicle industry, the construction and
operation of retail CNG filling stations and related issues; the Company's
ability to raise additional capital to finance the Company's activities; the
effectiveness, profitability, and the marketability of its products; the
future trading of the common stock of the Company; the ability of the Company
to operate as a public company; the period of time for which its current
liquidity will enable the Company to fund its operations; the Company's
ability to protect its proprietary information; general economic and business
conditions; the volatility of the Company's operating results and financial
condition; the Company's ability to attract or retain qualified senior
management personnel and research and development staff; and other risks
detailed in the Company's filings with the Securities and Exchange Commission.
These forward-looking statements involve known and unknown risks and
uncertainties and are based on current expectations, assumptions, estimates
and projections about the companies and the industry. The Company undertakes
no obligation to update forward-looking statements to reflect subsequent
occurring events or circumstances, or to changes in its expectations, except
as may be required by law. Although the Company believes that the expectations
expressed in these forward-looking statements are reasonable, they cannot
assure you that their expectations will turn out to be correct, and investors
are cautioned that actual results may differ materially from the anticipated
results.
For more information, please contact:
Sinoenergy Corporation
Mr. Shiao Ming Sheng, CFO
Phone: +86-10-8492-8149
Email: sheng@sinoenergycorporation.com
Web: http://www.sinoenergycorporation.com
CCG Elite Investor Relations Inc.
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
Webs: http://www.ccgir.com
SOURCE Sinoenergy Corporation