China Finance, Inc. Announces New Line of Business and the Signing of a Letter of Intent to Acquire a Controlling Interest in We
07 October 2008 - 5:43AM
PR Newswire (US)
NEW YORK and SHENZHEN, China, Oct. 6 /Xinhua-PRNewswire-FirstCall/
-- China Finance, Inc. (OTC:CHFI) (BULLETIN BOARD: CHFI) (the
"Company"), a provider of financial support and services for
China's large and rapidly expanding class of small and medium
enterprises ("SMEs"), today announced that the Company intends to
expand its business to include strategic direct investments in and
acquisitions of the equity of SMEs through its wholly-owned
subsidiary, Value Global International Limited, a British Virgin
Islands company ("Value Global"). The Company also announced today
that, consistent with this new line of business, Value Global has
signed a non-binding letter of intent to acquire 80% of the current
issued and outstanding shares of Wenxi Baiyu Magnesium Co., Ltd.
("WBM") from Shanxi Baiyu Industrial Group ("Shanxi") for
approximately $11,420,000 (the "LOI"). The proposed transaction is
subject to the satisfactory completion by the Company of due
diligence and business negotiations, the finalization of terms for
a definitive agreement, and the receipt of final approval from the
Company's board of directors and any approvals required under WBM's
and Shanxi's governing documents and applicable law. Currently, the
Company's business focuses on providing surety guarantees, loan
guarantees and short-term loans to SMEs when they seek access to
capital or seek to become publicly-traded companies in the United
States. The Company believes that the introduction of direct
investment and acquisition opportunities is a natural evolution and
expansion of its current business. To evaluate direct investment
acquisition opportunities, the Company will use investment analysis
and due diligence reviews similar to those used by the Company for
its current lines of business. In general, the Company expects its
direct investments and acquisitions to be made in SMEs in a wide
range of industries with annual revenues of at least $30 million.
Ms. Ann Yu, CEO of the Company, stated, "We are excited about the
implementation of this new line of business for the China Finance.
We anticipate that the direct investments will allow China Finance
to continue to grow strategically and prove to be lucrative for the
company." To kick off its new business line, the Company recently
signed the LOI with Shanxi to purchase 80% of its shares of WBM.
WBM was founded in April 2000 by Shanxi, a large paper making
enterprise, and is located in Yuncheng, Shanxi Province, which is a
major magnesium production base in China. WBM currently owns one of
the largest monomer magnesium spindle production lines in China
producing magnesium spindle, metal calcium and magnesium alloy.
Recently, WBM acquired dolomite mining rights to two independent
mines. Estimates place these mines' reserves of dolomite, a mineral
from which magnesium is obtained, at approximately 30,000,000 tons.
WBM's current magnesium production capacity is 30,000 tons per
year, and WBM is seeking to complete a project to reduce its
production costs by 15% by the end of 2008. In 2009, WBM plans to
increase its magnesium production capacity to 60,000 tons per year,
and to develop new magnesium alloy products. WBM currently
anticipates annual sales of $47,000,000 with $7,500,000 in net
profits for the fiscal year 2008 and annual sales of $116,000,000
with $14,500,000 of net profits in the fiscal year 2009. Ms. Yu
noted that: "The non-ferrous metal industry in China, including the
magnesium industry, is a growing area as magnesium is used in a
number of new areas of technology. We think that this investment
will prove profitable for China Finance." ABOUT CHINA FINANCE, INC.
China Finance, Inc. provides financial support and services -
primarily in the form of surety guarantees, loan guarantees, or
short-term loans - to privately owned SMEs when they seek access to
capital or to be acquired by a United States reporting company.
China Finance provides its services through its wholly-owned
indirect subsidiary, Shenzhen Hua Yin Guaranty and Investment
Limited Liability Corporation, which is located in the financial
district of Shenzhen, China. FORWARD-LOOKING STATEMENTS The
foregoing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements
relating to expected operating results and future performance, as
well as future events and developments, are forward-looking
statements and are not historical in nature. Generally, the words
"looking forward", "believe", "expect", "intend", "estimate",
"anticipate", "likely", "project", "may", "will" and similar
expressions identify forward-looking statements. The Company warns
that any forward-looking statements in this release involve
numerous risks and uncertainties and assumptions that may cause
actual results, levels of activity, performance or achievements to
differ materially from those expressed or implied by any
forward-looking statement. These risks and uncertainties include,
but are not limited to, the risk that the value of our portfolio
securities will decline resulting in a decline in the value of the
Company's stock, we might not achieve our anticipated development
milestones, the market for our services will not grow as expected
and we might not achieve our expectations. If these or other
significant risks and uncertainties occur, or if our underlying
assumptions prove inaccurate, our actual results could differ
materially. While the Company is an operating company, the Company
is registered as a "closed-end" investment company under the
Investment Company Act of 1940, as amended, and is subject to the
types of investment risks that effect investment companies. You are
urged to consider the operating and investment objectives and
strategies, expenses and history of the Company, along with all
risks and uncertainties noted above, and to review the risk factors
and financial information about the Company available in the
Company's registration statement on Form N-2, and the Company's
Annual and Semi-Annual Reports and other regulatory filings
accessible on the SEC's website at http://www.sec.gov/ . In light
of the uncertainty inherent in forward-looking statements, you
should not consider their inclusion to be a representation that
such forward-looking matters will be achieved. Moreover, pursuant
to the Private Securities Litigation Reform Act of 1995, such
statements speak only as of the date they were made, and the
company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events,
new information or otherwise. Past performance is no guarantee of
future results, and like all investments, you may lose money on an
investment in the Company's stock. DATASOURCE: China Finance, Inc.
CONTACT: Wei Wei, China Finance, Inc. at +1-212-823-0534 or Web
site: http://www.chinafinanceinc.com/
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