China Yuchai extends loan agreement with HLGE

HLGE will have a loan extension of S$93,000,000 originally granted to refinance the zero coupon, unsecured, non-convertible bonds issued by HLGE in 2006. It matured on July 3, 2009.

China Yuchai International Limited’s subsidiary Venture Lewis Limited entered into an agreement with HL Global Enterprises Limited for the loan extension.

This Loan was due to be repaid in July 2010 but was extended for one year pursuant to a loan agreement entered into in February 2010. The Company through another wholly-owned subsidiary, Grace Star Services Ltd., owns 47.4% of the issued ordinary shares of HLGE.

The unsecured Loan has, pursuant to the terms of the 2011 Loan Agreement, been extended for another one year from July 2011 and is due for repayment in July 2012.

Under the terms of the 2011 Loan Agreement, the interest payable is the aggregate of a margin of 1.75 per cent per annum, a reduction from 2.5 per cent per annum under the terms of the 2010 Loan Agreement, and the 12-month Singapore Interbank Offer Rate expressed in a percentage rate fixed by the Association of Banks in Singapore for Singapore Dollars as of January 28, 2011 which was 0.773 per cent.

In the event the interest rate charged on external funds utilized by China Yuchai for their investment in HLGE is increased, the Company has a right to negotiate with HLGE with a view to agreeing on an increase in the interest rate payable by HLGE under the 2011 Loan Agreement subject to compliance with certain regulatory requirements.  A negative pledge undertaking against any disposal or creation of security over substantially all of HLGE's assets without VLL's consent is also included.