TORONTO, ONTARIO--(Marketwired - Dec. 20, 2013) - Hanfeng Evergreen Inc. (TSX:HF) ("Hanfeng" or the "Company"), a provider of value-add fertilizers in China and South East Asia, announced today that it has received a notice from Beidahuang Agricultural Company ("BAC"), the Company's major customer, announcing BAC's decision to cease purchasing products from the Company and to terminate all cooperation and business with Hanfeng.
The notice indicated that BAC's decision was based upon the inability of the privatization proposal initiated by Mr. Xinduo Yu, the Company's CEO, to be completed. As a result, the purchase of products from Hanfeng was terminated by BAC effective immediately. BAC stated that it intends to claim outstanding payables of BAC to Hanfeng as compensation for any potential losses associated with the purchase termination.
Historically, BAC has represented a significant portion of the Company's sales from its Heilongjiang facility, as well as a supplier of raw materials. In the original privatization proposal, the Company had stated that the prospect of BAC's termination of business with Hanfeng was a significant risk if the privatization was not completed.
The management of Hanfeng is considering the implications of the notice from BAC and considering all of its rights and alternative actions. It is unable to quantify the estimated economic impact at this time.
About Hanfeng Evergreen Inc.
Hanfeng is a producer and supplier of value-added fertilizer solutions in emerging markets. It is one of the largest producers of slow and controlled release fertilizer in two of world's most significant agricultural markets: the People's Republic of China ("China") and the Republic of Indonesia. A Canadian Company, Hanfeng is headquartered in Toronto, Ontario and its shares trade on the Toronto Stock Exchange under the ticker HF.
This press release contains forward-looking statements based on current expectations. Forward looking statements include, without limitation, statements evaluating market and general economic conditions, and statements regarding growth strategy and future-oriented projected revenue, costs and expenditures. Actual results could differ materially from those projected and should not be relied upon as a prediction of future events. A variety of inherent risks, uncertainties and factors, many of which are beyond Hanfeng's control, affect the operations, performance and results of Hanfeng and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. Some of these risks, uncertainties and factors include the impact or unanticipated impact of: current, pending and proposed legislative or regulatory developments in the jurisdictions where Hanfeng operates, in particular in China and the Republic of Indonesia; the outcome of the loss of business from Hanfeng's major customer, BAC, the outcome of the privatization transaction; the outcome of shareholder disputes in the Indonesian joint venture; supply or purchases of non-compliant products; changes in tax laws; political conditions and developments; intensifying competition from established competitors and new entrants in the fertilizer industries; technological change; currency value fluctuation and changes in foreign exchange restrictions; changes in Chinese government support or restrictions on foreign investment; general economic conditions worldwide, as well as in China and South East Asia; Hanfeng's success in developing and introducing new products and services, constructing and operating new manufacturing facilities, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels. This list is not exhaustive of the factors that may affect any of Hanfeng's forward-looking statements. Risks and uncertainties about Hanfeng's business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, and management information circular filed with the securities regulatory authorities in Canada. Hanfeng undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or for any other reason. Readers are cautioned not to put undue reliance on forward-looking statements.