T S TELECOM LTD ("TOM-Y") - Subsidiary to Acquire shares of YingZhiXun Telecom
T S Telecom Ltd is pleased to announce that its wholly owned Hong Kong subsidiary, T S International Co., Ltd. ("TSI"), has entered into an agreement to acquire all of the issued and outstanding shares of YingZhiXun Telecom Equipment (Shenzhen) Co. Ltd. ("YZX") from a company controlled by three directors of T S Telecom Ltd.
YZX is a company incorporated under the laws of the People's Republic of China ("China") and is located in Shenzhen, China. Its principal business is the manufacture, assembly and sales of electronic lock control systems, ancillary devices for wireless telephone and security devices for telecommunication networks.
The purchase price for the shares of YZX will be based on the audited book value of the company as at June 30, 1999. TSI has engaged PricewaterhouseCoopers (Hong Kong) to perform an independent audit of YZX as of June 30, 1999. The purchase price shall be satisfied by way of cash consideration to be payable in three equal installments on each of September 30, October 31 and November 30, 1999.
The acquisition of YZX is coincident with TSI signing a licensing agreement (the "Agreement") with Sparton Technology, Inc. ("Sparton"), one of its key suppliers, under which TSI will have the right to manufacture Sparton's POWERCOM systems in China. The initial term of the Agreement is 3 years, and renewable annually thereafter. The POWERCOM systems are used in the monitor and control of various types of power equipment employed by telecommunication companies, including DC and AC distribution panels, rectifiers, central air conditioners, standby generators and valve regulated lead acid batteries. The Agreement also gives TSI exclusive distribution of POWERCOM systems in Asia.
The acquisition of YZX will provide TSI with immediate capabilities to manufacture power monitoring systems made possible with the Sparton Agreement. Says Mr. Raymond Lau, Chairman of T S Telecom and TSI, "the acquisition of YZX and its existing production facilities will allow TSI to move quickly to manufacture Sparton's POWERCOM systems with minimal additions of capital assets and human resources. The local manufacturing will also bring other substantial benefits to TSI, including lower product costs, higher gross margins, greater quality control, shortened delivery time, and lower import taxes and freight charges. With POWERCOM and related systems currently accounting for over 50% of our gross sales revenues, the potential benefits to TSI and T S Telecom are significant."
T S Telecom Ltd. together with its subsidiaries is a value added distributor, manufacturer and systems integrator of specialized telecommunications equipment in China, including Hong Kong. The Company's focus is to assist telecommunication providers to ensure trouble free and continuous operations of their networks. The Company offers a range of products including advanced maintenance and monitoring systems, and digital access equipment for telecommunication and related networks. It is the exclusive and/or preferred agent and distributor in Hong Kong and China for a number of U.S., European and Asian manufacturers of technology based products including Sparton Technology, Inc. and Opnet Technologies. It is also engaged in the development and production of its own Fiber Optics Monitoring System and Cable Pressurization Systems. T S Telecom Ltd, through its wholly owned Hong Kong subsidiary T S International Co., Ltd., has a 30% interest in a manufacturing joint venture in Shanghai, with the remaining 70% owned by a subsidiary of The Shanghai Telephone Office. TEL: (905) 470-2282 Randy Hung, Chief Financial Officer
of T S Telecom Ltd.
______________________________
|
