BEIJING (AFX) - Sichuan Changhong Electric Appliance Co (SHA 600839)said it has obtained a 3.0 bln yuan emergency line of credit to help cover the cost of operations in the face of heavy losses incurred from its biggest distributor, Apex Digital, in the US.
"The main use of (the funds) ... will be to manage (our) 2005 business operations," a statement from Changhong said.
China's "big four" state-run banks have also granted the troubled TV-manufacturer 8.5 bln yuan in credit and will soon offer a further 1.0 bln yuan in loans to help the company further, the China Securities Journal added.
Sichuan Changhong, one of China's top three TV-makers, sued Apex in December, claiming the California-based distributor had defaulted on bills worth 467.5 mln usd plus interest.
Under the terms of the loan agreement the Agricultural Bank of China will put together a package that will allow Changhong to handle its domestic and international settlements, while also extending credit to Changhong suppliers.
Li Xianguo, head of the Agricultural Bank's branch in Sichuan, was quoted by the newspaper as saying the decision to grant credit was based on Changhong's previous record of good corporate responsibility.
"There is record of good credit," Li said.
It remains unclear how Apex accumulated its losses during its partnership with government-run Changhong although the electronics distributor has reportedly had payment problems with other Chinese electronics exporters.
"Apex debts accrued over a lengthy period of time," Charlie Wang, partner at Cadwalader, Wickersham and Taft in Washington, who is representing Changhong, told Agence France-Presse.
"Apex was sometimes paying suppliers, and then not others," Wang said.
Wang and Changhong said Apex president David Ji avoided paying for Changhong's television and DVD shipments by issuing tens of millions of dollars in bad checks that could not be cashed.
However, Apex executives have counter-claimed that Changhong's accusations of non-payment were false and that Apex president David Ji had been forced to sign agreements that were unfavorable to Apex while being held under house arrest, in a recent report by the New York Times.
"Ji is currently being detained in a building owned by Sichuan Changhong Electric," Apex's senior corporate counsel, Jerry Huang, was quoted as saying by the New York Times, in a sworn declaration released Wednesday but signed in mid-December.
Changhong's lawyer Wang said he is not aware of any such coercion.
Changhong spokesman Liu Haizhong and police in Shanghai refused to comment.
Wang added that court affidavits which state Apex had paid 340 mln usd of the total owed to Changhong were misleading.
"Last year Apex paid 340 mln usd but even with that payment Apex still owes 480 mln usd," said Wang.
Changhong counselors also rejected reports the company is moving to take over Apex assets, which Changhong has estimated to be worth 150 mln usd.
"No such proposal is on the table, and if there was, I would definitely know about it," Wang said.
Ji, a naturalized US citizen from China, was detained by police in October in the mainland's southern city of Shenzhen over alleged fraud related to bank bills.
Apex was not available for comment.
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For more information and to contact AFX: www.afxnews.com and www.afxpress.com
"The main use of (the funds) ... will be to manage (our) 2005 business operations," a statement from Changhong said.
China's "big four" state-run banks have also granted the troubled TV-manufacturer 8.5 bln yuan in credit and will soon offer a further 1.0 bln yuan in loans to help the company further, the China Securities Journal added.
Sichuan Changhong, one of China's top three TV-makers, sued Apex in December, claiming the California-based distributor had defaulted on bills worth 467.5 mln usd plus interest.
Under the terms of the loan agreement the Agricultural Bank of China will put together a package that will allow Changhong to handle its domestic and international settlements, while also extending credit to Changhong suppliers.
Li Xianguo, head of the Agricultural Bank's branch in Sichuan, was quoted by the newspaper as saying the decision to grant credit was based on Changhong's previous record of good corporate responsibility.
"There is record of good credit," Li said.
It remains unclear how Apex accumulated its losses during its partnership with government-run Changhong although the electronics distributor has reportedly had payment problems with other Chinese electronics exporters.
"Apex debts accrued over a lengthy period of time," Charlie Wang, partner at Cadwalader, Wickersham and Taft in Washington, who is representing Changhong, told Agence France-Presse.
"Apex was sometimes paying suppliers, and then not others," Wang said.
Wang and Changhong said Apex president David Ji avoided paying for Changhong's television and DVD shipments by issuing tens of millions of dollars in bad checks that could not be cashed.
However, Apex executives have counter-claimed that Changhong's accusations of non-payment were false and that Apex president David Ji had been forced to sign agreements that were unfavorable to Apex while being held under house arrest, in a recent report by the New York Times.
"Ji is currently being detained in a building owned by Sichuan Changhong Electric," Apex's senior corporate counsel, Jerry Huang, was quoted as saying by the New York Times, in a sworn declaration released Wednesday but signed in mid-December.
Changhong's lawyer Wang said he is not aware of any such coercion.
Changhong spokesman Liu Haizhong and police in Shanghai refused to comment.
Wang added that court affidavits which state Apex had paid 340 mln usd of the total owed to Changhong were misleading.
"Last year Apex paid 340 mln usd but even with that payment Apex still owes 480 mln usd," said Wang.
Changhong counselors also rejected reports the company is moving to take over Apex assets, which Changhong has estimated to be worth 150 mln usd.
"No such proposal is on the table, and if there was, I would definitely know about it," Wang said.
Ji, a naturalized US citizen from China, was detained by police in October in the mainland's southern city of Shenzhen over alleged fraud related to bank bills.
Apex was not available for comment.
bms/hcw/net
For more information and to contact AFX: www.afxnews.com and www.afxpress.com