Company Press Release
Heng Fai China Industries Inc. Plans of Reorganization
VANCOUVER, B.C.--(BUSINESS WIRE)--March 25, 1998--Heng Fai China Industries Inc. (OTC:BB:HFCI) is an operating company, which specializes in identifying undervalued investment opportunities for acquisition and operation throughout the world.
After several years of direct investments in companies located in China, management has concluded that the returns on investments for acquisitions for smaller enterprises were not satisfactory.
Management of HFCI presently has plans to write-off or discontinue a large part of its operation in china and plans to re-focus its future investments in industries related to computer technology such as the Internet, long distance communication, and financial software applications for the securities business.
As part of the company's re-structure plan. HFCI has negotiated and terminated the following agreements:
1) Heibei Cherry Valley Duck Farm Co. Ltd. (''Heibei''):
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In accordance with the agreement between HFCI and Heibei and the relevant supplement thereto, both parties have unanimously agreed to terminate the agreement. The termination will be effective upon the approval of the local Chinese government.
2) Wuhan Hou Wang Container Co. Ltd. (''Wuhan''):
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In accordance with the joint venture agreement between HFCI and Wuhan, the parties have agreed to terminate the agreement, and all supplements thereto.
The joint venture's operating results did not meet applicable standards set forth in the agreement, and recent changes in Asian capital markets have made the joint venture unfeasible.
HFCI has agreed to return its 70 percent equity interest in the joint venture to Wuhan. In addition, Wuhan has agreed to return its 727,272 HFCI common shares to HFCI. Upon the termination of the agreement, HFCI shall be discharged of its rights, duties, and responsibilities as set forth in the agreement and any supplement thereto.
3) Cangzhou Great Wall Construction & Engineering Co. Ltd.
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(''Cangzhou''):
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People Cement Co. Ltd. (''People''), a subsidiary of HFCI, was incorporated in China by Cangzhou and HFCI for the purpose of creating development prospects in the province of Cangzhou. HFCI has agreed to reduce its 100% ownership in People by unconditionally transferring 81% of its interest to Cangzhou and another party.
4) Heng Li (Zhangjiagang Free Trade Zone) International Trading &
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Developing Co. Ltd. (''Heng Li''):
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The terms of the joint venture agreement between HFCI and Heng Li provided for the exchange of HFCI preferred shares, valued at $5 per share, for a 70% interest in the Zhangjiagang Fee Trade Zone International Development Centre Building (''Building'').
HFCI intends to terminate the agreement based on (i) the inability of the parties to delineate the rights of ownership and land use for the Building; and (ii) the delay by the local Chinese government to approve the form of stock to be used for the property exchange.
5) HFCI intends to change its corporate name to Powersoft Technologies Inc. subject to approval as required in its Certificate of Incorporation and By-Laws.
After giving effect to the actions described above, HFCI would have, as of March 16, 1998, 15,559,542 shares of Common Stock outstanding and no shares of preferred stock outstanding after cancellation of the above transactions.
After giving effect to the actions described above, HFCI's ownership interests would consist of the following:
(i) 19% interest in People Cement Co. Ltd.
(ii) 100% interest in Vancouver, Hong Kong Properties Ltd. The company holds residential rental properties located in the city of North Vancouver, British Columbia.
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Contact:
Heng Fai China Industries Inc.
Peter Lau, 212/269-7230 |
