China Fibretech to receive 20.3m yuan refund from municipal government

CHINA Fibretech Limited will receive a refund of 20.3 million yuan (S$4.11 million) that it had paid to a municipal government agency for land use rights.

The S-chip had in April 2008 entered into a land use agreement with the land bureau of Shishi municipal government to acquire a land parcel located in Wubao Industrial Zone to build a new plant for fabric dyeing operation.

The group was to pay a consideration of 18.7 million yuan, plus other costs of 1.7 million yuan, for the land parcel which spans 16,235 square metres.

The municipal government then issued an approval for the acquisition in May 2008. The certificate for the land use rights, however, has not been issued.

China Fibretech said in an exchange filing on Friday that the land parcel was found to be "no longer suitable" for constructing the plant, due to environmental protection planning by the local government. It will therefore be refunded the prepayment amount in the coming months, it said.

Separately, in response to a query by the exchange, China Fibretech said that its plants and machineries had an average utilisation rate of 5.57 per cent in the first half of the year.

The group also said that its shares will remain suspended until further notice, due to uncertainties surrounding claims from three customers.