China Industrial Group, Inc. Buys Cashmere International
Holdings Limited
NEW YORK, June 4 /PRNewswire/ -- China Industrial Group, Inc. (Nasdaq: CIND) today announced that on May 18, 1996 it signed a stock purchase agreement with Victoria Montreux, S.A., an affiliate of China Industrial Group, Inc. and the major shareholder of its Common Stock, to acquire Cashmere International Holdings Limited ("CARE"), a British Virgin Islands Corporation with total assets of approximately US$130 million and revenue of US$85 million based upon CARE's unaudited financial statements dated as of December 31, 1995, for
31,250 shares of its Series D Preferred Stock.
Each share of Series D Preferred Stock is convertible into 1,000 shares of Common Stock and can be redeemed by China Industrial Group, Inc. at any time within one year of its issuance.
"This important acquisition reflects both the Company's commitment to enhancing shareholder value and to increasing its worldwide growth prospects," commented Ms. Victoria Lam, Chief Executive Officer and President. "The purchase of CARE signals the Company's shift in focus from primarily a distribution operation to an industrial-based manufacturing concern. China Industrial Group, Inc. stands to benefit significantly from the continued expansion of the Chinese economy as well as China's move towards 'consumerism' as the population demands more and more quality goods."
The change in strategic focus also involves the disposal of non-core assets which will provide for further acquisitions both in China and overseas. The Company expects to capitalize on its expertise in reviving traditionally inefficient government-owned manufacturing facilities in China and anticipates steady growth in revenues and earnings.
The Company is of the opinion that, even though the transaction between the Company and Victoria Montreux, S.A. was not the result of arm's-length negotiations, the terms of the transaction are at least as favorable to the Company as could have been obtained from unaffiliated parties. And, in fact, the Company believes that due to the cultural nuances and political sensitivities in doing business in China, the purchase might not have been concluded without the support and backing of a Chinese-affiliated company.
Mr. Benthony F. Ip, Chief Financial Officer, also announced that "The Company has appointed Arthur Andersen & Co. in Hong Kong to serve as its secondary auditors. Work is currently underway to convert CARE's unaudited financials from China accounting standards to U.S. Generally Accepted Accounting Principles (GAAP). The reported figures will be for the year ended May 31, 1996. The Company will file with the Securities and Exchange Commission financial statements and pro forma formation as required."
China Industrial Group, Inc. manufactures, supplies, and distributes a diversified line of raw materials as well as semi-finished products throughout China and the Pacific Rim. The Company also provides investment and management services to customers in China and the Asia Pacific region. The Company expects to expand its product base to take advantage of the dynamic growth of the Chinese economy and China's rapidly expanding consumer market.
This press release contains forward-looking statements that involve a number of risks and uncertainties, including, but not limited to, changes in Chinese government policies, procedures, practices, and regulations, risks associated with new product development and manufacturing, uncertainties pertaining to
customer orders and demand of products, ability to execute on the Company's acquisition program, both in finding suitable acquisitions and financing thereof, changing economic and market conditions and other risk factors detailed in the Company's Securities and Exchange Commission filings.
Actual results, events, and performance may differ materially. Readers are cautioned not to place undo reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
/CONTACT: Scott G. Schiller, EVP, or Karen Matto, Investor Relations,
212-308-8877, both of China Industrial Group, Inc./09:51 EDT |
