BEJING, May 5 /Xinhua-PRNewswire-FirstCall/ -- Sinoenergy Corporation
(OTC Bulletin Board: SNEN) ("Sinoenergy" or the "Company"), a manufacturer of compressed natural gas (CNG) vehicle and gas station equipment and a designer, developer and operator of CNG filling stations in the People’s Republic of China (PRC), today announced that its subsidiary, Qingdao Sinogas General Machinery (“Qingdao Sinogas”) received a $17.87 million (RMB 124.76 million) strategic investment from a group of Chinese investors. Also, the Company is reorganizing its group structure to more clearly separate its business segments by function.
The strategic investors will acquire 24.95% ownership of Qingdao Sinogas, and the Company will retain 75.05% ownership. Through the strategic investment, Qingdao Sinogas will operate as a domestic joint venture and the registered capital of Qingdao Sinogas will also increase from $11,800,000 to $15,723,800. As part of the Company’s reorganization of its group structure, the Company’s subsidiary Qingdao Jingrun General Machinery Company (“Jingrun”) acquired interests in subsidiaries from Qingdao Sinogas that own and run CNG wholesale operations and develop and run retail CNG filling stations.
After reorganization, Qingdao Sinogas and its two subsidiaries will house the Company’s traditional manufacturing business segment. The subsidiary Qingdao Siongas Yuhan Chemical Equipment manufactures and sells customized pressure containers for different industries. The subsidiary Jiaxin Lixun designs and manufactures alternative fuel switching kits for motor vehicles.
“We are pleased to have new strategic investors in Qingdao Sinogas. We look forward to these investors bringing some advanced management concepts to our traditional manufacturing business. Qingdao Sinogas will use part of the investment to establish a new production line for the fabrication of steel containers, a key component in CNG truck trailer manufacturing. By fabricating our own steel containers, we should be able to achieve impressive cost savings. We hope that working with our new strategic investors will lead to increased sales of pressure containers and fuel switching kits,” said Mr. Bo Huang, CEO of Sinoenergy. “Moreover, under the joint venture structure, Sinogas may be able to take advantage of additional domestic financial resources to support our future business development, such as a listing on the PRC stock market.”
“Part of the investment will be used to further develop our retail CNG filling station business. Jingrun’s new role in our corporate structure will be to centralize the resources we need to develop and run our retail CNG filling station business. Jingrun’s role and growth are scalable and we expect Jingrun to make increasingly significant contributions to Sinoenergy in the future,” concluded Mr. Huang Bo.
The Company reiterated its prior financial guidance of net revenues in the second quarter ending March 31 of Fiscal Year 2008 to be $10 million and operating income to be from $3.0 to $3.5 million. For the fiscal year ended September 30, 2008, the Company expects to achieve revenue in the range of $53 to $56 million, and operating income in the range of $14 to $15 million.
The charts ( http://www.prnasia.com/sa/200805041407.jpg ) indicate the Company’s organization structure before and after the introduction of strategic investors.
About Sinoenergy:
Sinoenergy is a manufacturer of compressed natural gas (CNG) vehicle and gas station equipment as well as an operator of retail CNG stations in China. In addition to its CNG related products, the Company also manufactures a wide variety of pressure containers for use in different industries, including the design and manufacture of various types of pressure containers in the petroleum and chemical industries, the metallurgy and electricity generation industries and the food and brewery industries. The Company’s website is http://www.sinoenergycorporation.com .
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, future changes in the wholesale and retail price for CNG for vehicles in China; changes in policy by the national, provincial and municipal government of the PRC regarding CNG prices, the CNG vehicle industry, the construction and operation of retail CNG filling stations and related issues; the Company’s ability to raise additional capital to finance the Company’s activities; the effectiveness, profitability, and the marketability of its products; the future trading of the common stock of the Company; the ability of the Company to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company’s ability to protect its proprietary information; general economic and business conditions; the volatility of the Company’s operating results and financial condition; the Company’s ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
For more information, please contact:
Sinoenergy Corporation
Mr. Anlin Xiong, Vice President
Phone: +86-10-84932965 x860
Email: anlinxiong@sinoenergycorporation.com
CCG Elite Investor Relations Inc.
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
URL: http://www.ccgelite.com
