VANCOUVER, BC / ACCESSWIRE / August 10, 2020 / GLG Life Tech Corporation (TSX:GLG) (“GLG” or the “Company”), a global and agricultural leader in the natural zero-calorie sweetener industry, committed to the sustainable development of high-quality zero-calorie natural sweeteners, is pleased to announce the sale of one of its two idle facilities, along with substantial reduction of the Company’s debt.
After extensive negotiations stretching over multiple years, the Company has concluded the sale of its idle “Runhao” facility, located in Qingdao, China. Specifically, the Company sold the buildings and land use rights to the buyer, while retaining the assets, liabilities, and obligations of the Company’s subsidiary entity that previously held the buildings and land use rights. The Company had not used the facility for several years and its sale will not have any impact on the Company’s ongoing operations.
The deal involved not only the Company (as seller) and the buyer, but also the Company’s primary bank debtholder, China Cinda Assets Management Corporation Anhui Branch (“Cinda”). Under the terms of the deal, from the sale proceeds of RMB 222 million (approximately CAD 42.6 million), Cinda received just over RMB 102 million, and as a result of this payment, Cinda further agreed to waive an additional approximately RMB 90 million in amounts owed to Cinda.
Thus, the Company reduced its overall liability to Cinda from RMB 570 million (as at March 31, 2020) to RMB 387 million (as at July 31, 2020), which is a reduction of RMB 193 million (approximately CAD 37 million) or a 34% reduction in the Company’s obligations to Cinda. The carrying amounts of the Runhao buildings and land use rights were CAD 10.4 million.
Pursuant to the sale and the Chinese government’s conditions for approval for the deal, the Company is required to use the remaining proceeds from the sale to satisfy the Company’s tax obligation for Runhao, settle debts owed to certain third parties tied to the construction of Runhao, repay debts to a related party that has been instrumental in facilitating the Company’s overall restructuring efforts, and pay settlement fees for the transaction. The deal was finalized in late July and the disposition of Runhao will be recorded as effective within the third quarter of 2020.
This substantial reduction in debt significantly improves the Company’s balance sheet. Further, pursuant to a prior agreement with Cinda announced on September 9, 2019, this debt reduction positions the Company for further waivers of amounts owed to Cinda as future payments are made to Cinda. The Company continues to work closely with Cinda regarding its obligations and its plans to resolve those obligations through payments, waivers, and potentially a partial conversion of debt to equity in the Company’s main Chinese subsidiary, Runhai Anhui Biotechnology Joint Stock Company.
For further information, please contact:
Simon Springett, Investor Relations
Phone: +1 (604) 285-2602 ext. 101
Fax: +1 (604) 285-2606
About GLG Life Tech Corporation
GLG Life Tech Corporation is a global leader in the supply of high-purity zero calorie natural sweeteners including stevia and monk fruit extracts used in food, beverages, and dietary supplements. GLG’s vertically integrated operations, which incorporate our Fairness to Farmers program and emphasize sustainability throughout, cover each step in the stevia and monk fruit supply chains including non-GMO seed and seedling breeding, natural propagation, growth and harvest, proprietary extraction and refining, marketing and distribution of the finished products. Additionally, to further meet the varied needs of the food and beverage and supplement industries, GLG’s Naturals+ product line enables it to supply a host of complementary ingredients reliably sourced through its supplier network in China. For further information, please visit www.glglifetech.com.
Forward-looking statements: This press release may contain certain information that may constitute “forward-looking statements” and “forward looking information” (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
While the Company has based these forward-looking statements on its current expectations about future events, the statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors include amongst others the effects of general economic conditions, consumer demand for our products and new orders from our customers and distributors, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures and misjudgments in the course of preparing forward-looking statements. Specific reference is made to the risks set forth under the heading “Risk Factors” in the Company’s Annual Information Form published June 5, 2020. In light of these factors, the forward-looking events discussed in this press release might not occur.
Further, although the Company has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
As there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, readers should not place undue reliance on forward-looking statements.
SOURCE: GLG Life Tech Corporation
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