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FOUNTAIN VALLEY, CA, Jun. 30, 2004 (MARKET WIRE via COMTEX) -- Providential
Holdings, Inc. (OTC BB: PRVH) (Berlin Stock Exchange: PR7, WKN
935160)
(
www.phiglobal.com) today announced that it has officially closed the
transaction to acquire a 60% ownership stake in Tangshan Yutian Saw Corporation
(TYSC),
www.ytsawblades.com (English) and
www.ytsaw.com (Chinese), a leading
Chinese manufacturer of circular steel saw blades.
Providential Holdings now owns 60% of the common stock of Tangshan Yutian Saw
Corporation in exchange for a $45 million non-interest bearing note, due six
months after the closing date. If any payment of principal is not made on time,
interest shall accrue at a rate equal to five percent (5%) per annum on the
balance until paid in full or unless the maturity date is further extended by
mutual consent of both parties.
According to the terms of the transaction, Providential will be responsible for
taking TYSC public in the US and Europe within nine months following the closing
of the transaction. In addition, Providential will assist TYSC to market its
products outside of China and access the Western capital markets to support
TYSC's further growth.
At a conservative estimate of $97,720,000 in revenues and $22,330,000 in net
profits for Fiscal Year 2004, based on year-to-date performance, and the current
Price-Earnings ratio of 17.8 for the Appliance and Tool industry, TYSC's market
capitalization is expected to surpass $395,000,000 as a publicly-traded company,
or equivalent to almost $20 per share with 20 million shares to be issued and
outstanding.
Henry Fahman, Chairman and CEO of Providential Holdings, commented, "The closing
of this transaction marks a major milestone in our ability to execute our
business plan and create significant value. As part of our strategy, we will
continue to acquire and consolidate undervalued opportunities in various
high-growth industries to further increase value for our shareholders as well as
our target business partners. We expect to announce other imminent transactions
regarding our mergers and acquisitions activities in the near future. We also
plan to list our shares on the NASDAQ or a major exchange as soon as it is
feasible and will be taking big and bold steps to achieve these goals."
About TYSC:
TYSC is Asia's largest steel rotary saw blade manufacturer. Its products range
from the household saw blades to those industrial blades measuring more than
six-feet in diameter and costing thousands of dollars. These larger blades,
hardened alloyed or diamond tipped, are used to cut concrete blocks, canal
channels, trenches, metal bars, plates, timber, furniture wood and rocks. TYSC
currently employs more than 600 workers and its fixed assets include land,
buildings, and machine tools from Japan, Germany and USA. Its mega-watt carbon
dioxide lasers cut and anneal industrial saw blades in round-the-clock
production runs. The company occupies a land of about 28 acres with a production
area of about 800,000 square feet in Hebei, China, about 100 miles from Beijing,
the capital.
At the current exchange rate of 8.2766 Chinese Yuan per US dollar, TYSC's
revenues and net profits were $81,584,225 and $17,937,317 for the year ended
2003, as compared to $68,264,745 and $14,377,685 for the year ended 2002,
respectively. While revenues grew 19.51% from 2002 to 2003, net profits grew
24.76% during the same period. For the first five months of 2004, revenues were
$40,717,200 and net profits were $9,303,335, an equivalent of $97,721,286 and
$22,328,000, respectively, on an annualized basis for 2004.
URL's:
www.ytsawblades.com (English) and
www.ytsaw.com (Chinese)
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