Jul 27 2010
Andatee China Marine Fuel Services Corporation ("Andatee", or the "Company") (Nasdaq: AMCF), the leading independent operator engaged in the production, storage, distribution, wholesale purchase and sale of blended marine fuel oil for cargo and fishing vessels in Northern China, today announced that the Company has signed an equity purchase agreement under which Andatee is to acquire 52% equity of Hailong Petrochemical Co., Limited, ("Hailong"), a Tianjin, PRC based company engaged in retail and wholesale of fuel oil and petrochemical products.
Under the terms of the agreement, Andatee will acquire 52% of Hailong's equity for a cash payment of RMB 3.64 million (approximately US$ 0.54 million). Andatee will cooperate with Hailong on business development in the local market and provide capital for Hailong's expansion which will include four 1,000 cubic meter oil storage tanks, five storage tanks for raw materials with a total volume of 1,500 cubic meters, and 300 square meter plant used for slurry oil filtration.
The Company expects Hailong's sales volume to reach 10,000 tons in the remaining five months of 2010. Hailong's revenue is expected to be RMB 2.56 million(approximately US$ 0.38 million), 52% of which, or approximately RMB 1.33 million(approximately US$ 0.20 million), attributable to Andatee. The Company also expects to increase Hailong's sales volume to 48,000 tons in 2012. The Company anticipates that at that time, revenue will reach RMB 12.8 million(approximately US$ 1.89 million) and Andatee will earn a net income of RMB 6.66 million (approximately US$ 0.98 million).
"Our expansion to Tianjin in cooperation with Hailong marks another important milestone for Andatee," commented Mr. An Fengbin, Chairman, President and CEO of Andatee China Marine Fuel Services Corporation. "Tianjin is one of the busiest ports in China and we believe expanding our footprint to this area increases our visibility and market opportunity to provide high grade marine fuel to fishing vessels as well as small and medium sized cargo vessels."