BEIJING, CHINA--(Marketwire - March 11, 2012) - Mountain China Resorts (Holding) Limited (TSX VENTURE:MCG) ("MCR" or the "Company"). The Company wishes to advise that on March 2, 2012, the Company's Chinese operating subsidiary, Heilongjiang Yabuli On Snow Asian Game Village Hotel Co., Ltd. ("Yabuli"), missed the second installment principal repayment in the amount of RMB 30 million under Yabuli's RMB 250 million loan agreement (the "Loan Agreement") with the China Construction Bank (the "Bank"). Even though the Company recently completed a private placement for $19,026,000, due to foreign exchange regulations of People's Republic of China, the Company is not able to use the proceeds of this private placement to make the repayment to the Bank within a short period of time. The Company is currently negotiating with the Bank for postponement of this second installment principal payment for 2 years.
According to the Loan Agreement between Yabuli and the Bank, the Bank has the right to accelerate Yabuli's obligation to repay the entire unpaid principal plus interest immediately and taking necessary legal actions to enforce on the security. However, during the Company's initial negotiation with the Bank, representatives of the Bank have advised the Company that the Bank will not take immediate actions against Yabuli or the Company. The Company will provide an update on its negotiation with the Bank as soon as any new development takes place.
On a different note, the Company is pleased to announce that its other Chinese subsidiary, Heilongjiang Yabuluoni Zhiye Co., Ltd., has repaid its loan facility of RMB 150 million with Harbin Bank and thereafter secured a new loan from Harbin Bank for the amount of RMB 140 million (the "New Harbin Bank Loan"). The New Harbin Bank Loan carries a three year term with a maturity date of February 15, 2015 and a fixed annual interest rate of 7.315%, which interest to be paid on a monthly basis commencing February 16, 2012. The principal of the Harbin Bank Loan is repayable in four installments of RMB 35 million each, starting with the first installment repayment due on August 15, 2013 and each subsequent installment repayment due every six months thereafter. The original RMB 150 million credit facility with Harbin Bank was first repaid with an advance from a short term bridge loan made by a third party trust company. The Company then used the advance from the New Harbin Bank Loan and RMB 10 million of its own funds to repay the bridge loan from the third party trust company.
About MCR
MCR is the premier developer of four-season destination ski resorts in China. MCR is transforming existing China ski properties into world-class, four-seasons luxury mountain resorts with excellent real estate investment opportunities for discerning buyers. In February 2009, the Company's Sun Mountain Yabuli Resort was awarded Best Resort Makeover in Asia by TIME Magazine. Yabuli is also the permanent home of the China Entrepreneur's Forum the leading and most influential community of China's most distinguished and successful entrepreneurs and business leaders with over 5,000 members from across a variety of key industries.
ON BEHALF OF THE BOARD
Gang Han, Chief Financial Officer
The TSX Venture Exchange nor its Regulation Services Provider has neither approved nor disapproved the contents of this press release.
Contact Information:
Gang Han
Chief Financial Officer and Director
0086-10-66420566
investor_relations@mountainchinaresorts.com
www.mountainchinaresorts.com