Beacon Light Announces New Acquisition
Business Wire - July 28, 1999 08:26
HONG KONG--(BUSINESS WIRE)--July 28, 1999--Beacon Light Holding Corporation (OTC BB: BLHG) acquired 100% ownership of Hong Tex Virgin Island Company Limited and Hong Tex Holding Company Limited (Hong Kong).
Hong Tex Hong Kong own 51% of Cityford Dyeing and Printing Industrial Limited Factory in Wuhan (China) 49% of this factory is owned by the Wuhan municipal government. The Cityford factory is located in Wuhan (PRC) as one of the major core enterprises in the textile industry of Wuhan. The factory occupies an area of 40,000 sq. meters with a net building area of 22,100 sq. meters, it employs 1,000 employs and has an annual production capacity of 45 million yards of printed and dyed textile fabrics. The basic raw material processed is grey cloth, purchased mainly from India, Pakistan and China. The manufacturing process consists of design, printing form production, pretreatment, printing, dyeing, finishing and roll packing.
Hong Tex Hong Kong is the marketing and sales organization for the finished products, its clients are garment and household textile manufactures supplying many leading fashion retailers and household product chains. Sales ratio is 50% USA, 20% Japan, 20% Europe and 10% South East Asia. The acquisition of this group of companies, including its 51% share of the Cityford factory is made against 8,000,000 common restricted shares of Beacon Light Holding Corporation. At a glance this seems to be disproportional compared with the Net asset value of the Hong Tex (100%) and Cityford (51%) group of US $11,278,000. However, with this transaction the following factors have been taken into account.
- The considerable changes in Global garment manufacturing,
combined with a quota restrictions on garments manufactured in
China led to a downward trend on the turnover of the Hong Tex
group during the past two years.
Turnover 1996 - 27 million US Dollars.
Turnover 1998 - 9.3 million US Dollars.
- The need to shift business connectivity and marketing emphasis to
other parts of the world, making use of BLHG international sales
synergies.
- Underlying the transaction is a mutual agreement to realize
optional utilization of the production capacity.
- Improved effective response to the changing international garment
industries positioning.
During 1998 the company did run a modest profit of US $440,000. BLHG's management team is confident that already during operational year 2000, the turnover will be back at approximately 1996 level at a 2.5 million to 3 million Net profit.
The acquisition of Hong Tex by BLHG is a logical addition to their consumer products division in Asia and its development in manufacturing and wholesale distribution. It also fits the adopted strategy of need of "Turnaround" and engineering in greater China and South East Asia, at attractive investment/cost ratio.
BLHG thereby capitalizes on the long term experience of its management in international marketing and Asian manufacturing.
BLHG manufacturing and wholesale division consist now of:
Wellux Industries Ltd. (Hong Kong)
Wellux B.V. Europe (Netherlands)
J.V.A. Roosen (Netherlands)
Hong Tex group of companies (Hong Kong, China, Virgin Islands)
Products: Household Plastics
Household Electronics
Adult toys and novelties
Household textiles
Cookware and cutlery
Garment Fabrics
Hong Tex Virgin Island Company Limited Key Figures
Current assets US $1,280,000.
China factory investments US $5,000,000.
Net assets US $6,280,000.
Cityford Dyeing and Printing Industrial Ltd. Key Figures 31/12/98
Fixed assets
(Buildings, Lands, Machinery) US $35,500,000
Net current assets US $7,950,000
Total assets US $43,450,000
Bank facilities and loans US $28,650,000
Related Company Loans US $5,000,000
(Net total assets 51% participation) US $4,998,000
(All figures subject to final audit)
Plastic Factory in China
The consummation of the acquisition agreement of the Casin plastic factory in China is planned to find place within the coming two months, depending on completion of due diligence information still to be processed by the Chinese side.
Niphix Exchange
Niphix management and BLHG management are continuing their evaluation of options of cooperation in light of its strategic and financial consequence.
Outstanding Shares
BLHG acquired back and canceled over 14 million of its outstanding shares, in this process increasing shareholder value. At present BLHG has a total of approximately 16 million shares outstanding, in addition 8 million restricted shares will be issued for the Hong Tex acquisition making a total of approximately 24 million shares issued.
Safe Harbor Disclosure
This Press Release contains or incorporates by reference "forward-looking statements," including certain information with respect to plans and strategies of Beacon Light Holding Corporation. For this purpose, any statements contained herein or incorporated herein by reference that are not statements of historical facts may be deemed to be forward-looking statements. Without limiting the forgoing, the words "believes," "anticipates," "plans," "expects," "enhanced" and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause actual events or actual results of Beacon to differ materially from these indicated by such forward-looking statements.
CONTACT: Beacon Light, Hong Kong office
Hans Lodders
Phone: ++ 852 2331 2160
E-Mail: BLHcorp@AOL.com
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