Acquisition to be Accretive to Earnings
BEIJING, China, May 24 /Xinhua-PRNewswire-FirstCall/ -- General Steel Holdings, Inc. ("General Steel", or "GSHO") (OTC Bulletin Board: GSHO), China's first US publicly traded steel manufacturer, filed on May 22 a current report on Form 8-K announcing that it agreed to acquire from Victory New Holdings, Ltd., a British Virgin Islands company ("Victory New"), the remaining 30% outstanding shares of its subsidiary, Tianjin Daqiuzhuang Metal Sheet Co., Ltd. ("Daqiuzhuang Metal"). The mother of Henry Yu, the Chairman and Chief Executive Officer of General Steel, is the sole shareholder of Victory New. For the acquisition, GSHO agreed to issue an aggregate of 3,092,899 shares of its Series A Preferred Stock at a price of $2.00 per share. These new shares will have a voting power of 30% of the combined voting power of GSHO's common and preferred stocks for the entire life of GSHO. General Steel Holdings, Inc. will own 100% of Daqiuzhuang Metal after the closing of the acquisition.
Based on recent projections for Daqiuzhuang Metal, the acquisition of the minority interest would increase pro-forma earnings per share from 21 cents to 27 cents.
Daqiuzhuang Metal produces hot-rolled steel sheets used mainly in the construction of small agricultural vehicles and has a 50% domestic market share in this product niche.
"Our vision is to become China's largest non-government owned steel company, and gaining full-ownership of Daqiuzhuang Metal is a step in this process. There may come a time when Daqiuzhuang Metal is in a position to either buy or sell items from another company owned by General Steel. By taking this action, we wanted to remove any hint that a conflict of interest could exist in such a transaction. We are confident all General Steel stakeholders will appreciate our effort to grow our business in the most clear and transparent manner," stated Henry Yu, Chairman and Chief Executive Officer of General Steel Holdings, Inc.
About General Steel Holdings, Inc.:
General Steel Holdings, Inc., through its subsidiary Tianjin Daqiuzhuang Metal Sheet Co., Ltd, is a leading manufacturer of high quality hot-rolled steel sheets used in the construction of agricultural vehicles. Since 1988, it has expanded its operation to ten production lines capable of processing 400,000 tons of 0.7-2.0mm hot-rolled steel sheets per year. It is now the largest producer in its product category in China. For more information, visit http://www.gshi-steel.com .
Safe Harbor Statement:
The presentation may contain forward-looking statements concerning General Steel Holdings, Inc.'s business and products. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment market acceptance, additional competition from existing and new competitors, changes in government policies, changes in technology and various other factors beyond its control. All forward-looking statement are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. General Steel Holdings, Inc. undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information, please contact:
Ross Warner
General Steel Holdings, Inc.
Tel: +86-10-5879-7346
Email: Ross@gshi-steel.com
Skype: ross.warner.generalsteel
