Short-term and Long-term Bank Loans

9 Months Ended

Jun. 30, 2016

Short-term and Long-term Bank Loans [Text Block]

11. Short-term and Long-term Bank Loans

Bank borrowings from Bank of Dandong as of September 30, 2015 and June 30, 2016 consisted of the followings:

		September 30,		June 30,
		2015		2016
Bank of Dandong:
Short-term bank borrowings	$	12,585,740	$	684,675
Long-term bank borrowings		-		12,709,251
	$	12,585,740	$	13,393,926

On June 10 and 15, 2016, the Company repaid the one-year short term loans of RMB30 million and RMB50 million, respectively, obtained under its banking facilities in June 2015. On June 14, 2016, the Company renewed its banking facilities from Bank of Dandong to provide a maximum amount of RMB130 million (approximately $19.6 million), including three-year long-term loans and three-year revolving bank acceptance and letters of credit bills for the period from June 13, 2016 to June 12, 2019. Under the banking facilities, in June 2016, the Company borrowed various three-year bank loans that totaled RMB84.5 million (approximately $12.7 million), bearing fixed interest at 7.2% per annum. The Company also borrowed a series of short term loans that totaled $0.7 million arising from the matured letters of credit from Bank of Dandong under the credit facilities.

The banking facilities were guaranteed by Mr. Xianqian Li, our former CEO, Ms. Xiaoqiu Yu, the wife of the Company’s former CEO, Shenzhen BAK Battery Co., Ltd., the Company’s former subsidiary (“Shenzhen BAK”), Mr. Yunfei Li, the Company’s CEO, and Ms. Qinghui Yuan, Mr. Yunfei Li’s wife.

The facilities were also secured by the Company’s assets with the following carrying amounts:

		September 30,		June 30,
		2015		2016
Pledged deposits (note 2)	$	1,519,601	$	1,459,450
Prepaid land use rights (note 9)		8,631,995		8,125,757
Buildings		13,120,083		12,596,736
Machinery and equipment		3,831,790		3,263,865
Construction in progress		6,228,371		6,868,440
	$	33,331,840	$	32,314,248

As of June 30, 2016, the Company had unutilized committed banking facilities of $4.6 million.

During the three months ended June 30, 2015 and 2016, interest of $103,023 and $241,652, respectively, was incurred on the Company's bank borrowings.

During the nine months ended June 30, 2015 and 2016, interest of $294,064 and $732,082, respectively, was incurred on the Company's bank borrowings.