Far East Wind Power Signs Binding LOI

Far East Wind Power Corp announced that it has signed a binding letter of intent with Beijing Tongchuang Hengyuan Technology Development Company for the purpose of obtaining some of the basic rights in the wind farm situated at Ningxia Hui Autonomous Region, People's Republic of China.

The signed LOI restructured the JV ownership participation of Far East to 51% and that of its Chinese counterpart to 49%. The agreement requires Far East to bring in funds to the tune of $20.0 million for the development, while the local Chinese partner will implement the business plan and work towards getting necessary permission to launch the wind farm from the concerned authorities, and ensure low interest bank loans for $70.0 million. The details of the joint venture include construction and development of a 50 MW wind farm, with an established capability to earn an annual income of $10.2 million. The signed LOI additionally confers the right of first refusal, on an earlier sanctioned 50 MW wind farm with assets that can be developed into a 1 GW if fully built up and utilized and could generate annual revenue of $204.0 million.

This JV empowers Far East as its major stock holder to group all liabilities and assets and fallouts of the operations according to the accounting guidance. Far East will get the powers to manage all cash payments, receipts, declaration of dividends and approve or decline any considered or implemented equity of debt financing. Additionally the JV empowers Far East to decide on the quantum of monthly cash dividend distribution between the two companies.