Proposed Acquisition of Qinghai GuoXin
Strengthen its Foothold in Industrial Aluminum Extrusion Products Industry
HONG KONG, Feb. 9 /PRNewswire-Asia/ -- The largest industrial aluminum extrusion products developer and manufacturer in Asia and China, with a particular focus on the transportation, machinery equipment and electric engineering sectors - China Zhongwang Holdings Limited ("China Zhongwang" or the "Company," together with its subsidiaries the "Group," stock code: 1333) announced it has entered into the framework agreement with Xining Municipal Investment Management Limited ("Xining Investment"), Qinghai Northwest Aluminum Alloy Material (Group) Limited ("Qinghai Northwest") and Xining Development of Economic Technology Zone Group Co. ("Xining ETZ") to acquire 100% equity interest in Qinghai GuoXin Aluminum Industry Incorporated Company ("Qinghai GuoXin"), one of the largest professional manufacturers of high-precision hard aluminum alloys in China, with a total investment amount of approximately RMB1.2 billion.
Qinghai GuoXin is based in Qinghai Province in the PRC and is one of the largest professional manufacturers of high-precision hard aluminum alloys in China. Its key products include special-shaped pipes, porous dissimilar material and special purpose aluminum alloy, which can be broadly used in aviation, aerospace, transportation, new energy and petroleum industries etc.
Based on the unaudited financial information as at 31 December 2009, Qinghai GuoXin had total assets of approximately RMB1.3 billion, current assets of approximately RMB155 million, fixed assets of approximately RMB1.1 billion, net assets of approximately RMB448 million and a total of debt liabilities of approximately RMB880 million. Qinghai GuoXin has 10 large aluminum extrusion machines, including double action 100MN direct extrusion press, double action 55MN indirect extrusion press, single action 36MN direct extrusion press and double action 28MN indirect extrusion press etc.
As at 31 December 2009, the production capacity of China Zhongwang was approximately 600,000 tonnes, as compared to approximately 535,000 tonnes as at 31 December 2008. As disclosed in the Company's prospectus dated 24 April 2009, the Company intends to expand its production capacity to approximately 800,000 tonnes by 2011 by installing additional production lines. If the proposed acquisition proceeds, Qinghai GuoXin is expected to contribute an additional production capacity of approximately 120,000 tonnes to the Group. As such, the Group can expect to expand its production capacity with one year in advance to 800,000 tonnes by the end of 2010 and further consolidate its leading position in the industrial aluminum extrusion product market of the world.
Mr. Liu Zhongtian, Chairman and President of China Zhongwang, said, "Capacity Expansion has long been our key focus for sustainable development. Besides purchasing new production facilities, we have been proactively identifying potential acquisitions to expand our production capacity. Qinghai GuoXin is a leading manufacturer of high-precision hard aluminum alloys in China. We believe that the proposed acquisition could boost the capacity expansion plan of the Group in order to cope with the limitation of production capacity of the existing machines and facilities, while striving better returns for our shareholders."
China Zhongwang endeavors in the weight-reducing development in the transportation sector and has a diverse base of notable clients which includes transportation, machinery equipment and infrastructure operators in the railway, metropolitan conductor rail, automobile, shipbuilding, aircraft industries, as well as manufacturers of machinery equipments.
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About China Zhongwang Holdings Limited
China Zhongwang was listed on the Stock Exchange of Hong Kong Limited on 8 May 2009 and it is the largest aluminum extrusion products manufacturer in Asia and China, with a particular focus on the transportation, machinery and equipment and infrastructure sectors for its industrial aluminum extrusion products, and has strong research and development capabilities. According to CRU Strategies Limited (CRU), China Zhongwang was the world's third largest and Asia's and China's largest aluminum extrusion products manufacturer in terms of production capacity in 2007. The Company possesses 66 extrusion production lines, including a 125MN oil-driven dual action extrusion press which is currently the largest of its kind in China and the most advanced extrusion press in the world, which enable the Company to produce plain, sizable, large-section and high-precision industrial aluminum extrusion products tailored to its customers. These products are widely used as components for end products of the transportation sector such as railway, metropolitan railway, aviation, vessels, automobiles and machinery equipments. The Company has been appointed by the Ministry of Railway as one of a few qualified suppliers for manufacturing carriages of wagon and passenger trains and subway conductor rail. By the end of 2009, the Company's designated production capacity reached approximately of 600,000 tons.
Issued by Porda International (Finance) PR Group for and on behalf of China Zhongwang Holdings Limited.
