＜Taipei＞ Industrial Bank of Taiwan (IBT), the arranger of the syndicated loan of NT$800 million and US$ 15 million for Hwa Fong Rubber Ind. Co., Ltd. (Hwa Fong) and its subsidiary Hwa Fong (BVI) Holdings Co., Ltd., has completed the signing of the loan agreement today (Dec. 10). With a 2-times oversubscription, the loan facility was co-arranged by 4 banks, Ta Chong Bank, First Commercial Bank, Taishin International Bank, and Land Bank of Taiwan. Other participants included Taichung Bank, Yuanta Bank, Chang Hwa Bank, Hua Nan Bank and Taiwan Cooperative Bank.

The signing ceremony was conducted this morning at Grand View Hotel in Chang Hwa County. Chairman Chen of Hwa Fong, VP Vance Chien of IBT, and representatives from co-arrangers attended the ceremony and signed the loan agreements.

Founded in 1959, Hwa Fong has more than 50 years of history and a good reputation as a listed company (stock code 2109). The company engages in the production of various kinds of tires, mainly for motorcycles, scooters and agricultural/industrial vehicles. Having established factories in Chang Hwa/Taiwan, Thailand and China, Hwa Fong sells its products to the U.S., Europe and Asia. With its excellent manufacturing and R&D capabilities, Hwa Fong has had long-term support from its largest shareholder, Sumitomo Rubber Industries Co., Ltd. (Japan), the world’s sixth-largest tire company. In addition, the company has also entered into long-term cooperation with Michelin, Yamaha Taiwan and SanYang Industires. Developing continuously its high-end products and expanding international marketing, Hwa Fong has enjoyed continued growth in its U.S., European and South East Asian markets. It is contemplating on developing tires with higher gross margin and entering into motorcycle tires market in South East Asia.

As the rubber prices started to drop substantially in late 2008, Hwa Fong benefitted greatly from lower raw material costs. Gross margin and profit were both enhanced. The after-tax EPS for the 3 quarters ending September, 2009 is NT$ 0.5, 10 times that of 2008.

After Chairman Chen Hen Yi assumed the chairmanship position in June 2009, he used his financial expertise to raise funds and launch internationalization plan for Hwa Fong. He also plans to capitalize on the urban development policy recently launched in China to revive Hwa Fong’s land assets in China, which is expected to improve Hwa Fong’s financial structure by bringing substantial development profits to the company.

IBT commented that Hwa Fong has technology support from large international player and is committed to developing high-end products, thus Hwa Fong is able to increase its 2009 profits greatly over 2008. The continued robust growth from emerging markets such as China, South East Asia and India has offered great promises to Hwa Fong for its further growth. To accommodate Hwa Fong’s need for financial structure improvement and working capital, IBT has arranged a 5-year syndicated loan for the company. The loan facility has attracted involvement of many financial institutions and received very warm response with a 2-times oversubscription, which demonstrated big support from participant banks for Hwa Fong.