-- (MARKET WIRE)
China Infrastructure Investment Corporation (NASDAQ: CIIC) (the "Company"), an emerging infrastructure development company operating in the People's Republic of China, today announces its audited financial results for the fiscal year ended June 30, 2011. The Company's revenues increased approximately US$13.2 million, or 30.9%, from US$42.6 million, to US$55.8 million for the fiscal year ended June 30, 2011. The gross profit increased approximately US$12.3 million, or 47.3%, from US$26.0 million to US$38.3 million for the fiscal year ended June 30, 2011. The Company took a one-time US$145.9 million bad debt write-off of related party loans, resulting in a net loss of US$136.5 million for the year.
In connection with, and as a result of the related party loans write-off as of June 30, 2011, on October 10, 2011, the Company entered into contractual agreements (known as "variable interest entity" (VIE) arrangements) with the shareholder of Zhengzhou Simian Real Estate Co., Ltd. ("Simian"), which is wholly owned by Henan Shengrun Real Estate Co., Ltd. Li Xipeng, the Chief Executive Officer, Chairman and significant shareholder of the Company is a 51% owner of Henan Shengrun Real Estate Co., Ltd. According to the arrangements, the Company will acquire a 51% equity interest in Simian through a series of variable interest entity ("VIE") contractual arrangements. The Company has agreed that the acquisition of the 51% interest in Simian from Mr. Li's company, will be deemed settlement and satisfaction in full of the outstanding obligations under the note receivable from Tai Ao of $57,169,593 as of June 30, 2011.
Simian is a developmental stage real estate company. It has four land parcels with a total site area of approximately 137,000 square meters. It is located in the western part of the city of Zhengzhou, the provincial capital of Henan province. The Company's headquarters is also located in Zhengzhou. Zhengzhou is the capital city of Henan province, the second most populated province in China with a population of over 100 million. Zhengzhou is also the political and economic center of Henan province and central China. Simian plans to develop these four parcels of land into a commercial and residential complex, which will include a shopping mall, a five-star hotel, an office tower, a retail outlet facility, and a residential complex with high-rise apartment buildings, condominium units, and an underground parking facility. The planned construction area is 978,148 square meters. On July 20, 2011, the Board of Directors engaged American Appraisal to perform an independent valuation of the property. On September 30, 2011, American Appraisal's final report was presented to the Board in which it valued the land parcel property at RMB1 billion (approximately $154 million).
Mr. Li Xipeng, Chairman and Chief Executive Officer, states, "Despite the worldwide recession, our core toll road business has achieved a high level of revenue and has seen an increase in gross profit as a result of China's continuous growing economy. We believe that the write off of the un-collectible related party loans strengthens the Company's balance sheet, so the Company can move away from non-performing assets and focus on new infrastructure opportunities. We are excited about the development of Simian. We believe that the Simian project will bring long term value and returns to the business and to our shareholders."
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, but not limited to, the impact of competitive conditions and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of construction, financing costs and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof. No securities regulatory authority has either approved or disapproved the contents of this news release.
Investor's Relation Contact:
Mr. Wang Feng
Room D, 2F, Building 12,
Xinxin Huayuan, Jinshui Road,
Zhengzhou, Henan Province
The People's Republic of China
© 2014 Canjex Publishing Ltd. All rights reserved.