China Bio Energy Holding Announces Acquisition of Gas Station in the City of Xi'an
Release Date: 2009-08-17
XI'AN, China, Aug. 17 /PRNewswire-Asia-FirstCall/ -- China Bio Energy Holding Group Co. Ltd. (Nasdaq: CBEH) (the "Company"), a leading integrated bio-diesel producer & distributor, wholesale distributor and processor of heavy oil and finished oil products, and operator of retail gas stations in China, today announced that it has reached an agreement to acquire, through a 29-year lease, all of the assets of a gas station located in the city of Xi'an, Shaanxi Province, PRC.
The gas station was acquired for a total consideration of $8.5 million and will be operated under a 29-year lease. The gas station distributes both gasoline and diesel, which includes blended bio-diesel. During the past twelve months, the gas station sold approximately 4,300 tons of fuel and generated revenues of $4.1 million. For the next twelve months, the Company estimates it will sell approximately 6,000 tons and generate approximately $5.3 million in revenues.
Operating as both a producer and distributor, China Bio Energy has the ability to provide stable supply for each of its six gas stations. Customers pay cash with an average inventory turn of 3 days. As of March 31, 2009, average gross margins for its service stations were 13% with net margins of 11%, which is higher than traditional distribution.
"We are pleased to complete this acquisition, which marks our seventh gas station in Shaanxi province," stated Mr. Gao Xincheng, Chief Executive Officer of China Bio Energy Holding Group. "This acquisition is part of our strategy to lease an additional three to four gas stations by the end of 2009, which will provide incremental revenues and profitability."
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