Nam Tai Property Inc. is pleased to announce that Nam Tai Investment (Shenzhen) Co., Ltd. (“Nam Tai Investment”), a wholly owned indirect subsidiary of the Company, has entered into a loan agreement (the “Loan Agreement”) with the Shenzhen Branch of Bank of Guangzhou Co., Ltd (the “Lender”), a regional commercial bank in the PRC. Pursuant to the Loan Agreement, the Lender has agreed to grant to Nam Tai Investment a loan facility of up to RMB1.06 billion (approximately US$164 million) with a five-year term (the “Loan Facility”). The Loan Facility bears an annual floating interest rate which is the aggregate of the loan prime rate applicable to RMB term loans with a tenor of one year and 265 basis point per annum. As at the date of this announcement, Nam Tai Investment has drawndown an amount equal to approximately RMB 575 million (approximately US$89 million) under the Loan Facility.
As security for the Nam Tai Investment’s obligations under the Loan Agreement, (a) Nam Tai Group Limited (“NTGL”), a wholly owned subsidiary of the Company and the sole shareholder of Nam Tai Investment, has pledged all of its shares in Nam Tai Investment in favour of the Lender; (b) each of NTGL and Zastron Electronic (Shenzhen) Co., Ltd., a wholly owned subsidiary of Nam Tai Investment, has provided guarantee in favor of the Lender; (c) Nam Tai Investment has pledged all receivables relating to Nam Tai Technology Center (the “Project”) in favor of the Lender; and (d) Nam Tai Investment has granted a property mortgage over the land upon which the Project is situated in favor of the Lender.
The Company has faced challenges operating its business as (1) demand letters were received from all of its existing lenders, namely Shenzhen Branch of Bank of China Limited, Shenzhen Branch of Bank of Beijing Co., Ltd., Zhuhai Branch of Xiamen International Co., Ltd., and Shenzhen Branch of Industrial Bank Co., Ltd., demanding immediate repayment of their respective outstanding loans in full given the significant uncertainty in respect of its share ownership and the potential changes in the Board of Directors of the Company, and (2) lawsuits were filed by the Company’s suppliers in the PRC in relation to various alleged outstanding payments whereby the respective PRC courts have issued rulings to freeze bank accounts of the Company’s relevant subsidiaries restricting remittance therefrom. In light of such liquidity issues, the Company’s operation has been disrupted and it has been unable to meet the progress payment of its suppliers. Further, there are potential threats that the existing lenders would take further legal actions against the Company and/or its subsidiaries regarding the defaults in respect of their respective outstanding loans. Despite such unfavorable environment, the Company has successfully secured the Loan Facility and demonstrated its continued efforts to act in the best interests of its shareholders. In view of the Loan Facility obtained by Nam Tai Investment, the Company has repaid the amount due to the Shenzhen Branch of Bank of Beijing Co., Ltd and Shenzhen Branch of Industrial Bank Co., Ltd. in full, and it will continue to address its liquidity issues progressively. As such, the Company believes it will be in a position to gradually restore the normal operations of the Company and its subsidiaries, settle the disputes with its suppliers as appropriate, and cure the remaining defaults with its existing lenders. The Company will from time to time make announcement as appropriate to update its shareholders.