Providential Holdings Completes Acquisition of Major Steel Tool Manufacturer
FOUNTAIN VALLEY, CA -- (MARKET WIRE) -- 06/30/04 --
Providential Holdings, Inc. (PRVH - news) (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)
About Providential:
Providential Holdings and its subsidiaries engage in a number of diverse business activities, the most important of which is mergers and acquisitions. The Company seeks to acquire and consolidate undervalued opportunities in various high-growth industries to maximize and sustain value for its shareholders and target partners by combining expertise in both the product and capital markets. URL: http://www.phiglobal.com
Safe Harbor: Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results in the future to differ materially from forecasted results. These risks and uncertainties include, among other things, the company's ability to attract qualified management, raise sufficient capital, and effectively compete against similar companies.
Contact:
Providential Holdings
Henry Fahman
714-849-1577
www.phiglobal.com
Tangshan Yutian Saw Corporation
An Fang Zhen
86-315-656-6358
www.ytsaw.com
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