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Providential Agrees to Acquire Hefei Iron & Steel in Anhui Province
Jun 4, 2004 (financialwire.net via COMTEX) -- (FinancialWire) Providential Holdings, Inc. (OTCBB: PRVH; Berlin Stock Exchange: PR7, WKN 935160) says it has reached a memorandum of understanding to acquire and restructure Hefei Iron & Steel Group Company, Ltd, Hefei, Anhui Province, China.
Hefei Iron & Steel Group founded in 1958 and reorganized in 1998 with a registered capital of $140,000,000. In 2003, its revenue was $257,000,000 and gross profit of $36,125,000. From Jan 1, 2004 - Apr 30, 2004, its revenue was $105,000,000 and gross profit was $11,375,000. Its current steel making capacity is 1,400,000 metric tons per year. Providential intends to lead a consortium to invest into HISG to upgrade its equipment and boost its capacity to 2,000,000 metric tons per year.
According to the memorandum, both parties have agreed on ten major guidelines leading to a definitive agreement for the transaction, subject to further due diligence review, the approval of shareholders and the board of directors of both companies and appropriate regulatory agencies.
Henry Fahman, Chairman and CEO of Providential Holdings, commented, " China is now the world's leading steel producer in terms of tonnage. Its booming construction, automotive and ship building industries all need steel. With adequate investments into HISG, we will be able to upgrade its equipment to make more value added steel products, such as high strength rolled steel for making cars and other specialty steel. We believe this transaction once consummated will bring tremendous value to our shareholders."
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