Pu’er Lancang Ancient Tea Co., Ltd. Secures RMB40 Million Credit Facility with China Merchants Bank

Key Points of the Announcement

• Credit Agreement Signed: Pu’er Lancang Ancient Tea Co., Ltd. (“Company”) has entered into a Credit Agreement with the Kunming Branch of China Merchants Bank Co., Ltd., securing a credit facility of RMB40,000,000.
• Term and Conditions: The facility is for a 12-month period, starting on 21 April 2026 and ending on 20 April 2027.
• Mortgage Guarantee: To secure the facility, the Company has agreed to a maximum amount mortgage contract, providing a mortgage over the property and land use rights of nine buildings at its original tea factory in Menglang Town, Lancang County.
• Asset Details: The mortgaged assets are registered under Real Estate Certificate No.: Yun (2020) Lancang County Real Estate No. 0001806, and are held in the Company’s name.
• Counterparty Independence: China Merchants Bank and its ultimate beneficial owners are confirmed as third parties independent of the Company and its connected persons.

Potentially Price Sensitive Information for Shareholders

• Impact on Capital Structure: The new facility allows the Company to diversify its financing channels, improve liquidity, and optimize its liability structure. This move is likely to strengthen the Company’s balance sheet and support ongoing operations.
• Operational Flexibility: Access to additional working capital can support expansion, procurement, and operational needs, potentially boosting future earnings and facilitating strategic investments.
• Asset Encumbrance: Shareholders should note that key assets of the Company (nine original factory buildings) are now mortgaged as collateral for this facility. While this is a standard practice, it does increase the Company’s secured debt profile.
• Board Approval: The terms of the agreements were determined after arm’s length negotiations, and the Board (including all independent non-executive Directors) has stated that the terms are fair, reasonable, and in the interests of shareholders.
• Leadership & Governance: The announcement is signed by Chairlady and Executive Director, Du Chunyi. The current Board composition includes both executive and independent non-executive directors, ensuring oversight and governance.

Details Investors Should Not Miss

• The Company is proactively managing its capital needs by leveraging existing assets to secure a substantial credit line.
• With the facility in place, the Company is positioned to address liquidity requirements and business growth, which may positively influence share value.
• The mortgage arrangement, while strengthening the Company’s access to capital, also ties up significant physical assets, which investors should monitor for any future changes in asset encumbrance or debt levels.
• No relationships or transactions with connected persons are involved, ensuring transparency and adherence to Hong Kong Stock Exchange rules.

Conclusion

This announcement is significant for investors as it reflects Pu’er Lancang Ancient Tea Co., Ltd.’s strategic approach to capital management and operational flexibility. The RMB40 million credit facility, backed by a mortgage over key assets, positions the Company to improve its financial structure and meet upcoming business demands. Shareholders should monitor the Company’s use of the facility and any future impacts on asset encumbrance or debt obligations. The move may influence the Company’s share price, given the potential for improved liquidity and growth prospects.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with financial advisors before making any investment decisions. The information is based on public disclosures and may be subject to change.

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