Quarterly report pursuant to Section 13 or 15(d)

Bank Loans

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Bank Loans
6 Months Ended
Jun. 30, 2018
Bank Loans [Abstract]  
BANK LOANS

NOTE 11 – BANK LOANS

 

Short-term bank loans

 

Short-term bank loans represent the amounts due to various banks that are due within one year. These loans can be renewed with the banks upon maturities. At June 30, 2018 and December 31, 2017, short-term bank loans consisted of the following:

 

    June 30,
2018
    December 31,
2017
 
Loan from Fujian Haixia Bank, due on September 14, 2018 with annual interest rate of 7.178% at June 30, 2018 and December 31, 2017, collateralized by Pingtan Fishing’s 17 fishing vessels   $ 3,778,376     $ 3,826,023  
Loan from Fujian Haixia Bank, due on September 30, 2018 with annual interest rate of 7.178% at June 30, 2018 and December 31, 2017, collateralized by Pingtan Fishing’s 17 fishing vessels     755,675       765,205  
Loan from China Development Bank, due on March 8, 2018 with variable annual interest rate based on LIBOR(1) plus 230 basis points (3.721% at December 31, 2017), secured by the Company’s restricted cash which is a deposit with the lender of approximately $1 million (RMB 6.6 million) and collateralized by seven vessels     -       5,000,000  
Loan from China Development Bank, due on April 24, 2018 with variable annual interest rate based on LIBOR(1) plus 230 basis points (3.721% December 31, 2017), secured by the Company’s restricted cash which is a deposit with the lender of approximately $0.7 million (RMB 4.6 million) and collateralized by four vessels     -       3,500,000  
Loan from Fujian Haixia Bank, due on September 11, 2018 with annual interest rate of 2.990% at June 30, 2018 and December 31, 2017, collateralized by Pingtan Fishing’s 17 fishing vessels     1,509,750       1,509,750  
    $ 6,043,801     $ 14,600,978  

 

(1) Represents six-month LIBOR rate on the loan commencement date.

   

Long-term bank loans

 

Long-term bank loans represent the amounts due to various banks lasting over one year. Usually, the long-term bank loans cannot be renewed with these banks upon maturities. At June 30, 2018 and December 31, 2017, long-term bank loans consisted of the following:

 

    June 30,
2018
    December 31,
2017
 
Loan from The Export-Import Bank of China, due on various dates until January 30, 2023 with annual interest rate of 4.900% at June 30, 2018 and December 31, 2017, guaranteed by Xinrong Zhuo and Ping Lin and collateralized by 2 fishing vessels and collateralized by two related parties’ investments in equity interest of one PRC local banks   $ 12,090,802     $ 14,538,888  
Loan from China Development Bank, due on various dates until November 27, 2023 with annual interest rate of 5.145% at June 30, 2018 and December 31, 2017, guaranteed by Xinrong Zhuo, Honghong Zhuo, Mr. and Mrs. Zhiyan Lin and 6 fishing vessels     7,859,021       8,646,812  
Total long-term bank loans   $ 19,949,823     $ 23,185,700  
Less: current portion     (5,894,266 )     (5,968,596 )
Long-term bank loans, non-current portion   $ 14,055,557     $ 17,217,104  

 

The future maturities of long-term bank loans are as follows:

 

Due in twelve-month periods ending June 30,   Principal  
2019   $ 5,894,266  
2020     6,045,401  
2021     2,267,025  
2022     1,662,485  
2023     3,173,836  
Thereafter     906,810  
    $ 19,949,823  
Less: current portion     (5,894,266 )
Long-term liability   $ 14,055,557  

 

The weighted average interest rate for short-term bank loans was approximately 5.3% and 3.5% for the six months ended June 30, 2018 and 2017, respectively.

 

The weighted average interest rate for long-term bank loans was approximately 5.1% and 5.0% for the six months ended June 30, 2018 and 2017, respectively.

 

For the three months ended June 30, 2018 and 2017, interest expense related to bank loans amounted to $396,183 and $705,418, respectively, of which, $200,873 and $57,085 was capitalized to construction-in-progress, respectively. For the six months ended June 30, 2018 and 2017, interest expense related to bank loans amounted to $858,442 and $1,413,830, respectively, of which, $200,873 and $62,421 was capitalized to construction-in-progress, respectively.