Changfeng Energy Inc.

Changfeng Energy Inc.

April 04, 2011 11:58 ET

Changfeng Expands Bank of China Bank Loan Facility to RMB 130 Million

TORONTO, ONTARIO--(Marketwire - April 4, 2011) - Changfeng Energy Inc. ("Changfeng")(TSX VENTURE:CFY), a natural gas utility operating in China, today announced that the Bank of China ("BOC") agreed to increase the Company's bank loan facility by RMB 30 million in the form of a one year line of credit (the "Credit Line"). The Credit Line is secured by the same collateral as that for its RMB 100 million ($15.4 million) long term loan announced on January 25, 2010. As a result, the BOC has increased the Company's total loan facility to RMB 130 MM.

As of the date of this press release, RMB 20 million ($3.1 million) was drawn on the Credit Line and is due in March 2012. It will be used for working capital purposes. The interest rate on the loan is the variable rate set by the People's Bank of China. As is the practice with lines of credit in China, the Company can apply to the BOC to have the Credit Line renewed when it comes due. Typically, credit lines are renewed. Further, the Company can apply within the one year term of the Credit Line to draw additional amounts up to RMB 10 MM.

Mr. Lin, Chairman and CEO added that, "when we initially applied to the BOC for a long term loan, we asked for more than RMB 100 million given the amount of security we were offering. However, the local branch we were dealing with only had authorization to loan up to RMB 100 million on an expedited basis. As such, it was expected that over time we would be able to increase the size of our total bank facility. We are pleased with the increase of up to RMB 30 million with RMB 20 million already drawn and see it as a vote of confidence in our business particularly given the tighter credit conditions in China." 

About Changfeng Energy Inc.

The Company is a natural gas utility in the People's Republic of China ("China"). It is engaged in the design, construction, ownership and operation of natural gas pipelines and related gas distribution activities such as CNG (compressed natural gas) refueling stations. The Company markets and distributes natural gas to residential, commercial and industrial users as well as vehicle users.

The Company is headquartered in Toronto, Ontario and its shares trade on the TSX Venture Exchange.

This press release contains forward looking statements based on current expectations. These forward looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward looking statements. Risks and uncertainties about Changfeng's business are more fully discussed in the Company's disclosure materials, including its information circular and MD&A, filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars except for noted otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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