Tonglu - Zhaiqi Toll Road

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FACB, through its wholly-owned subsidiary Alpha Terrace, entered into a joint-venture with Tonglu Transportation Investment Co. Ltd. (state owned company) to construct and operate the toll road linking Tonglu and Zhaqi. FACB acquired 55% of the project company's shares, while Tonglu acquired 45%; subsequently, Tonglu divested 12.5% of its shares to Zhejiang Oil Refinery Investment Co. Ltd. The total investment of the project amounted to US$ 19.2 million (Rmb$ 160 million), of which US$ 10.6 million (Rmb$ 88 million) was to be supplied by FACB. The toll road has been in operation since the joint-venture agreement was signed, but toll collections only started in 3/97. Of the US$ 10.6 million (Rmb$ 88 million) to be paid by FACB for the 55% equity, US$ 4.2 million (Rmb$ 35.2 million) was paid between 01/97 and 03/97; FACB was required to pay 15% on the outstanding balance. On 3/99, FACB sold its 55% shares back to Tonglu Transportation for US$ 4.3 million (Rmb$ 35.7 million); the company argued that the rate of return on the project was not enough to match the 15% interest rate of the outstanding balance the company had to pay to Tonglu Transportation. None None