To: Taree Lyn who wrote (276 ) 7/21/1999 7:14:00 AM From: Thomas Kundrat Read Replies (1) | Respond to
Hartcourt to Participate in National ISP Venture in China
Business Wire - July 20, 1999 12:14
LOS ANGELES--(BUSINESS WIRE)--July 20, 1999--The Hartcourt Companies
Inc. (OTC BB: HRCT) Tuesday announced that it has signed a Joint Venture
Agreement with IPC Technology International Ltd. to establish a
nationwide internet service provider in China.
Hartcourt will undertake to raise $45 million in debt and equity for the
joint venture, while IPC, a representative of a major Beijing Internet
corporation, will provide it with a national license, an operating
agreement with China Telecom, and a 200,000-subscriber base within 24
months.
Both parties are committed to provide the most sophisticated technology
for the system infrastructure in addition to strong strategic alliances
for its marketing program. The national license will also allow the
joint venture to engage in e-commerce activities and other Internet
services.
The joint venture will be called SINONET, and should start the operation
within six months . IPC will hold 65 percent and Hartcourt will hold 35
percent of ownership in the ISP joint venture. Hartcourt has the option
to purchase an additional 16 percent once the Chinese government changes
its policy of foreign participation in the telecom industry, especially
when China is admitted to the World Trade Organization (WTO).
While there are more than 400 ISP licenses in China, less than 50 are
operating and their operations are limited to the county or the city in
which they are licensed. There are only four national licenses; the
biggest is CHINANET, which is owned and operated by China Telecom.
A national license will allow the joint venture company to operate in
any county or city, making the marketing of its services easier,
especially in creating brand name for SINONET. The 200,000-subscriber
base will create the third-largest ISP in China.
Dr. Alan Phan, chairman and chief executive officer of Hartcourt, said,
"Previously, our deal with a Chinese ISP could not be completed due to
the issue of management change and company liabilities. This joint
venture is definitely a much better proposition. The JV will start
without any liability, and will have 200,000 subscribers by year 2,
guaranteed by the Chinese partner. With the explosion of Internet usage
in China, the potential for SINONET to become the leading ISP of China
is not far-fetched."
Jansen Wong, chairman and president of IPC Technology, said, "We are
delighted to work with Hartcourt management. From the beginning, we
found them to be strongly committed to the goal of being the best
Internet company in China. It is our same objective. The Chinese
consumers will greatly benefit from this venture because we will bring
the latest technology to SINONET, and a customer service program
unparalleled in China."
Four weeks ago, Hartcourt announced that it has signed an agreement to
purchase 35% ownership in UAC Stock Trading OnLine. Phan said, "With the
investment in UAC and this joint venture with IPC, Hartcourt is in a
unique position to become a household name in the Asian, and perhaps the
global, Internet industry."
Certain statements in this news release may constitute "forward looking"
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements involve risks,
uncertainties and other factors, which may cause the actual results,
performance or achievement expressed or implied by such forward-looking
statements to differ materially from the forward-looking statements.
CONTACT: The Hartcourt Companies Inc.
Dr. Alan V. Phan, 562/426-9796
