L.K. Technology inks HK$475mn syndicated loan facility

The group received strong vote of confidence from 13 respected international and local lenders.

L.K. Technology Holdings Limited (“L.K. Technology”), the world’s largest die-casting machines manufacturer, on Tuesday announced that its wholly-owned subsidiary L. K. Machinery Company Limited, has successfully raised a 3-year HK$475 million term loan and revolving credit facility agreement (“Syndicated Loan”) with a consortium of 12 international and local banks and lead-arranged by Hang Seng Bank Limited. The response from the banking community was overwhelming, as this three-year facility was oversubscribed and upsized from its original target of HK$400 million to HK$475 million.

The proceeds of the syndicated loan will be used to refinance the outstanding amount of the Group’s bank borrowings, while the remaining will be used as general working capital of the Group.

Mr Cao Yang, Chief Executive Officer of L.K. Technology, said, “We are very pleased to work through our key relationship with 13 respected banks in securing the facility, which represents a strong vote of confidence in our business solid foundation and robust potential.

Now is an opportune time to undertake a refinancing exercise given the attractive terms and pricing available. The syndicated loan provides us with more flexibility to allocate resources for the Group’s expansion in the years to come.”

To cope with future business development, the Group is expanding its manufacturing facilities at Kunshan, Jiangsu, with the aim of boosting production capacity for computerized numerical controlled (CNC) machines to capture the strong growth of customer demand in the China market. Meanwhile, to meet the increasing market demand for large-tonnage die-casting machines and large-tonnage plastic injection molding machines, the Group is continuing the development of a new phase at its Shenzhen factory. In China’s 12th Five-Year Plan, equipment manufacturing remains one of the core industries, strengthening the growth potential for equipment manufacturers, including the Group, accodring to an L.K. Technology report.

L.K. Technology earlier reported encouraging annual results for the year ended 31 March 2011. Both revenue and profit reached new heights. The Group recorded a revenue of HK$2,600 million, an increase of about 85% compared to that of last year. Profit attributable to equity holders amounted to HK$259 million, demonstrating a remarkable increase of over tenfold as compared to that of last year.