Unassociated Document
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
November 2, 2009
CHINA RECYCLING ENERGY
CORPORATION
(Exact
name of registrant as specified in its charter)
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Nevada
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000-12536
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90-0093373
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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Suite
909, Tower B
Chang An
International Building
No. 88
Nan Guan Zheng Jie
Xi An
City, Shan Xi Province
China
710068
(Address
of principal executive offices, including zip code)
(86-29)
8769-1097
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
£
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01. Entry
into a Material Definitive Agreement
On
October 26, 2009, Xi’an TCH Energy Technology Co., Ltd. (“Xi’an TCH”), a wholly
owned subsidiary of China Recycling Energy Corporation (the “Company”), and
Inner-Mongolia Erdos TCH Energy Saving Development Co., Ltd. (the “Joint
Venture”; and together with Xi’an TCH, the “Borrowers”), a joint venture between
Xi’an TCH and Erdos Metallurgy Co., Ltd., entered into a Non
Promissory Short Term Revolving Financing Agreement (the “Agreement”), dated and
effective from October 12, 2009, with Citi Bank (China) Co., Ltd., Shanghai
Branch (the “Lender”).
The
maximum financing provided under in the Agreement is RMB 20 million
(about US$2.9 million). The Agreement allows for the Borrowers to
borrow money to maintain current liquidity for notes receivable, such as trade
notes payable to the Company, or in order to capitalize on discounts for
early payment of accounts payable, such as for equipment or raw materials. The
maximum maturity date for each financing is six months. The interest rate for
any note discount financing will be determined by the relevant note discount
documents and the interest rate for accounts payable financing will be
determined by the relevant accounts payable documents.
The
proceeds received under the financing arrangement are to be used for working
capital and to purchase raw materials. The amounts received pursuant to the
Agreement will be secured by an account maintained by the Company with the
Lender, accounts receivable of the Borrowers and the guarantees of Shanghai TCH
Energy Technology Co., Ltd , an affiliate of Xi’an TCH, and Guohua Ku, the
Chairman of the Board and Chief Executive Officer of the Company.
The
penalty interest rate is subject to the lowest penalty interest rate allowed by
People’s Bank of China’s relevant policy on over-due loan (including principal
and interest). The Lender has the discretion to accelerate maturity date of the
outstanding loans and request for payment as well as to cancel or terminate the
financing. The Borrowers agree not to use the loan to pay for
related party transactions
without the Lender’s permission. The Borrowers agree to
deposit their income from sales of products and services into the accounts with
the Lender (hereinafter referred to as “income amount”) and average monthly
income amount of the Borrowers should be no less than RMB 5
million. The condition for the Borrowers’ first draw from the
loan is when the single month income amount reaches 80% of expected income
amount as set forth in the Agreement for that month. The expected income amount
for each month is as below:
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Month
of Income
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Expected
Income Amount (RMB)
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September,
2009
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6,600,000
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October,
2009
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6,600,000
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November,
2009
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11,900,000
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January,
2010
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11,900,000
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February,
2010
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11,900,000
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March,
2010
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11,900,000
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April,
2010
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11,900,000
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May,
2010
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11,900,000
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June,
2010
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11,900,000
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July,
2010
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11,900,000
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August,
2010
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11,900,000
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September,
2010
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11,900,000
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October,
2010
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11,900,000
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The
interval between separate drawings by the Borrowers under the
Agreement should be no less than 30 days. Each drawing of the Borrowers
should be no more than 35% of the maximum financing limit. If the Borrowers
single month income amount is less than the 70% of the expected income amount of
that month, the Lender has the right to suspend, cancel or terminate the
financing and accelerate maturity date of any outstanding amount and request for
immediate reimbursement.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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China
Recycling Energy Corporation
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/s/
Xinyu Peng
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Xinyu
Peng, Chief Financial Officer
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