China Integrated Energy (PINK:CBEH)

XI'AN, China, Jan. 4, 2011 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc.  today announced that it has entered into definitive agreements with several institutional investors for a registered direct placement of approximately $24.17 million of common stock at a price of $7.00 per share. The Company will issue a total of 3,453,572 shares to the institutional investors.

In addition, the Company will issue to the investors warrants to purchase up to 1,726,786 shares of common stock, which, if fully exercised, would provide an additional $12.95 million in gross proceeds to the Company. The warrants have an exercise price of $7.50 per share and are exercisable for a six month and five trading day period commencing six months and one day following the closing date

CBEH raises funds:

XI'AN, China, Dec. 29, 2010 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. today announced that it has entered into definitive agreements with several institutional investors for a registered direct placement of approximately $15.3 million of common stock at a price of $7.00 per share. The Company will issue a total of 2,185,716 shares to the institutional investors.

In addition, the Company will issue to the investors warrants to purchase up to 1,092,858 shares of common stock, which, if fully exercised, would provide an additional $7.65 million in gross proceeds to the Company. The warrants have an exercise price of $7.00 per share and are exercisable for six months following the closing date.

The Company anticipates that the capital raised in this registered direct placement will be used for biodiesel capacity expansion and working capital for wholesale distribution of finished oil and heavy oil products.

GeoTeam® Note: What can we really say? Why offer stock?

• Cash balance of $79.7 million.
• Analyst estimates indicate that 2011 EPS will grow 28.5% to $1.85.
• Just appointed KPMG as auditors.

The company should let these positive developments play out before issuing stock at an absurd PEG ratio of  0.22.  Dilution will only be 8%, assuming conversion of IN THE MONEY warrants.  At least the overhang that this development could have been having on CBEH stock price may be over.

On October 28, 2010, Xi’an Baorun Industrial Development Co., Ltd., the variable interest entity and deemed subsidiary through certain contractual relationships of China Integrated Energy, Inc., entered into a loan agreement with Communications Bank Holdings Co., Ltd., Shaanxi Branch, whereby the Lender provided a working capital loan to Xi’an Baorun Industrial in the amount of RMB40,000,000, approximately US$6,000,000, which loan matures on October 28, 2011. The loan bears a per annum interest rate of the base rate floating upward by 10% and is guaranteed by two guarantee corporations pursuant to separate guarantee agreements entered into between the guarantee corporations and the Lender. In connection with the loan, Xi’an Baorun Industrial pledged certain of its properties to the guarantee corporations as security for the loan pursuant to two separate pledge agreements. Pursuant to the first pledge agreement, Xi’an Baorun Industrial pledged 4,000 tons of gasoline to the guarantee corporations. Under the terms of the pledge, in the event the gasoline’s total value decreases to under RMB24,000,000, approximately US$3,589,000, the guarantee corporations are entitled to require Xi’an Baorun Industrial to either make a matching repayment of the loan to the Lender or provide additional security (for example, by increasing the volume of gasoline pledged) to account for the difference. Pursuant to the second pledge agreement, Xi’an Baorun Industrial pledged its biodiesel production line located in Xiaochuanbao, Tongchuan to Xi’an Economic Technology Investment Guarantee Company, one of the two guarantee corporations.