SANTA ROSA, Calif., Aug. 9, 2012 (GLOBE NEWSWIRE) -- ZAP Jonway (OTCBB:ZAAP) received US$12.7 million in dealership financing from China Everbright Bank at the end of July 2012 to finance the purchase of vehicles for sale at qualified dealerships in China.
The dealership financing obtained by Jonway Auto is for authorized, eligible and approved Jonway Auto dealers in China. It is a new model of financing support that Jonway Auto was able to negotiate with China Everbright Bank after more than 1 year of due diligence. The fund is available for qualified dealers to finance "flooring" of the vehicles purchased to be sold in the dealership. The dealership has to be qualified by China Everbright Bank and the approved amount of loan for that dealership is drawn down based on the value of the orders placed with Jonway Auto. The bank pays Jonway Auto for the orders placed and the dealer repays the bank when the vehicles are sold. The dealer is liable for repayment of the loan as the vehicles are sold over a six month period. Jonway Auto provides the guarantee behind this repayment. This is a revolving credit line that is drawn down and repaid as the vehicles are bought and sold by qualified dealers. The overall amount available could increase as the business of each dealership grows.
"With the tightening of credit availability from banks worldwide, we are pleased with the support of this credit facility for our qualified dealers," said Alex Wang, Co-CEO of ZAP Jonway and CEO of Jonway Auto. "Starting now we will be able to begin offering in aggregate a total of 80 million RMB (USD$12.7 million) to our dealerships. We believe that this is a very important and valuable support we are giving to our qualified dealers and will encourage them to market and support our products more aggressively."