(PR NEWSWIRE) Hartcourt to Purchase 51% of Elephant Talk, a Premier Telecom S
Hartcourt to Purchase 51% of Elephant Talk, a Premier Telecom Services Company
in China and Hong Kong
Agreement is First Step in Rolling Out Services Via ETNS'
$450 Million Fiber Optic Network in China
LOS ANGELES, Jan. 24 /PRNewswire/ -- The Hartcourt Companies, Inc.
(OTC Bulletin Board: HRCT; Frankfurt: HCT) www.hartcourt.com, announced today
that it has agreed to purchase 51% of Elephant Talk, a brand-name provider of
long-distance telecom services in China and Hong Kong. In their most recent
annual financial statement, audited by Deloitte, Touche, Tohmatsu, Elephant
Talk showed total revenue of HK$ 202 Million (US$ 26 Million) and a net profit
of HK$ 7.3 Million (US$ 0.94 Million).
The shareholders of Elephant Talk are also joint venture partners with
China Huandao Group in the ETNS project in China. The joint venture has
acquired a fiber optic network measuring 8,307 kilometers that runs through
the economic heartland of eastern China (PRC) and has obtained a nation-wide
ISP and IP phone license in China to provide network services over this
extensive backbone.
ETNS is expanding the global coverage of its network by developing a next
generation of strategically located, fault-tolerant facilities -- Internet
eXchange Centers (IXC) for network and facilities outsourcing. ETNS now has
IXCs in Hong Kong, Shenzhen, Guangzhou, Shanghai and Beijing.
ABN-AMRO, a prestigious international investment banking group, recently
placed an estimated valuation range of US$450 Million to US$650 Million on the
ETNS network. Hartcourt has agreed to invest in this broadband network and to
assist ETNS evolve into a publicly traded entity via an IPO or merger.
Mr. Russelle Choi, Chairman & CEO of Elephant Talk, said, "We have chosen
Hartcourt to be our partner in developing Elephant Talk and other
infrastructure projects in China because they have proved to be the 'can-do'
people. We share the same vision, the same management philosophy and the same
positive attitude. Together with Hartcourt, we believe in the ultimate
success of our mission."
Dr. Alan Phan, Hartcourt's Chairman commented, "Elephant Talk is our first
step in creating a major broadband network for voice and data communications
in China. Through our partnership with Innostar, Elephant Talk has the
potential to become a leader among the next generation of Chinese
telecommunications companies, generating strong revenue and profit from
IP phone services.
"Hartcourt's major objective in structuring this transaction is the
operation and full implementation of ETNS' 8,300 km fiber optic network
connecting 15 major Chinese cities. Considering the total valuation of the
network and its related services, estimated at US$450 Million, this will be a
significant undertaking and its success will be a major factor in determining
Hartcourt's future valuation."
Hartcourt CEO, Dr. Charlie Q. Yang stated, "Upon completion of this
transaction, we will be able to include Elephant Talk's revenue and net income
onto Hartcourt's consolidated balance sheet. We believe that investors will
understand that given factors such as lower operational costs and stronger
regulatory control in China, telecom companies such as Elephant Talk typically
enjoy much high market valuations as the result of achieving higher profit
margins than those achieved by similar companies operating in the western
world. We anticipate improved performance at Elephant Talk and ETNS as we
move further into the expansion of their services into additional markets in
China."
About Elephant Talk
Based in Hong Kong, Elephant Talk is one of the leading international
long-distance service providers to China and Hong Kong. Established in 1995,
it holds a number of licenses including US FCC 214, HK ETS and ISP PNETS
allowing it to provide voice, data transmission like IDD, pre-paid calling
card and ISP services. Its customers include major telecom carriers in the
U.S. including AT&T, Cignal Global, Frontier, and MCI Worldcom and from Hong
Kong: New World Telephone, New T&T, and MCI Asia. Additional information on
Elephant Talk can be obtained via the Company's web site:
www.elephanttalk.com.
About ETNS
Originally established as Elephant Talk Network Services Ltd. in July
1999, to take advantage of Elephant Talk's existing customer base, business
relationships, and technical expertise in developing Internet based
communication services, ETNS is a leading provider of Internet solutions to
commercial enterprises requiring high bandwidth, business-critical operations
in the PRC (China). Headquartered in Hong Kong, the company holds ETS, ISP
PNETS, and External FTNS licenses and has been engaged in the provision of
broadband Internet access and outsourcing services for international and
multi-national businesses.
Through a joint venture with China Huandao Group, a unit of the People's
Liberation Army of China, ETNS acquired an 8,300 km fiber optic network. The
network, which connects over 15 major cities in eastern China, enables ETNS to
provide broadband connectivity, co-location server hosting, IP phone services,
collaborative systems management and other Internet technology services to
ISPs, ICPs, and ASPs. A complete roll out of all these services will begin in
March 2001. In 2000, ABN-AMRO completed a valuation of the network, giving
ETNS and its related services, an estimated value from $450 Million to $650
Million, with EBIT reaching $262 Million in the fourth year of operation.
Additional information regarding ETNS is available at the company web site:
www.etns.net.
About Hartcourt
The Hartcourt Companies is a holding and development company that is
building a network of Internet and telecommunication service companies in The
People's Republic of China (China), including Hong Kong, in partnership with
Chinese entrepreneurs as well as Chinese government-owned entities.
Hartcourt's business goal over the next three years is to complete a series of
IPOs or spin-offs focused on four main divisions: StreamingAsia, the streaming
content (video/audio) web-casting and web hosting leader in Hong Kong;
SinoBull Financial Group, the multi-media financial data provider and online
securities trading platform; the Broadband ISP and Internet Infrastructure
Group; and Hartcourt Capital Inc., the E-Finance transactions platform
offering online banking, securities, insurance, equipment leasing, credit, and
B2B transaction settlements. Detailed information on Hartcourt can be
obtained via the company's Web site: www.hartcourt.com.
Forward-looking statements
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.
SOURCE The Hartcourt Companies, Inc.
-0- 01/24/2001
/CONTACT: Jack Westfield, Vice President, Corporate Finance of The
Hartcourt Companies, Inc., 310-410-7290, JWestfield@Hartcourt.com/
/Web site: etns.net
/Web site: elephanttalk.com
/Web site: hartcourt.com
(HRCT) |
