VANCOUVER, April 19 /CNW/ - Hanwei Energy Services Corp. ("Hanwei" or the "Company") announces a non-brokered private placement offering of up to 10,000,000 common shares in the capital of the Company (the "Shares") at a price of $0.35 per Share, which represents a five-day volume weighted average trading price (including April 19, 2010), for gross proceeds of up to $3,500,000 (the "Offering"). Proceeds from the Offering will be used to fund the Company's joint venture with Ershigs Inc. ("Hanwei Ershigs"), and for operating costs and general working capital.
The Company's founder, President, CEO and principal shareholder, Mr. Fulai Lang, has indicated that he intends to subscribe for up to 6,000,000 Shares under the Offering, representing up to 60 percent of the Offering and up to 7.6 percent of the number of Shares issued and outstanding assuming the maximum of the Offering is completed. As of April 19, 2010, Mr. Lang owns a total of 11,116,800 Shares, representing approximately 16.1 percent of the outstanding number of Shares on a non-diluted basis. Mr. Lang also holds options to acquire up to 100,000 Shares at an exercise price of $0.75 per share.
"We are taking all the appropriate actions to put the Company back on the path to profitability," stated Mr. Lang. "We have a recognized quality brand in our core FRP markets. We continue to make progress on restructuring our wind business and our management team is focused on the tasks at hand, which gives me every confidence that our efforts will be successful and that Hanwei will emerge from this downturn a stronger company. As a sign of my belief, commitment and support of the company, I have elected to make further investment in Hanwei."
Certain other directors and senior officers of the Company may also subscribe for Shares under the Offering that would represent an aggregate of less than 1 percent of the number of Shares issued and outstanding.
The proposed purchase of Shares by the Company's directors, senior officers, and control persons constitutes a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). However, exemptions from the formal valuation and minority approval requirements for a related party transaction is expected to be available to the Company as the fair market value of the expected subscriptions from the Company's directors, senior officers, and control persons will not exceed 25 percent of the Company's market capitalization.
The completion of the Offering is subject to TSX approval. The Company expects to complete the Offering in May 2010.
About Hanwei Energy Services Corp.
Hanwei Energy Services Corp. provides high value products and services for the energy sector in China and the Asia region. Hanwei serves its major energy customers through manufacturing facilities in China, producing products for the oil, coal power and wind power industries. Hanwei is focusing on providing products and services that address the growing need for improved energy efficiency and environmental protection in China and the Asia region. www.hanweienergy.com
Certain information in this press release is forward-looking within the meaning of certain securities regulations, and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the private placement offering of Shares, the terms and use of proceeds of the Offering, the subscription by Mr. Fulai Lang and any other insiders under the Offering, as well as information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. The forward-looking information is based on certain assumptions, which could change materially in the future, including the assumption that the Offering will be completed on the terms and conditions as disclosed, that regulatory approval will be obtained and no shareholder approval will be required, that the proceeds will be used for the purposes disclosed, that the Company's efforts in restructuring the wind power business will be successful, and that the Company will emerge from this downturn a stronger company. The forward-looking information in this press release describes the Company's expectations as of the date of this press release. Material factors or risks which could cause actual results or events to differ materially from a conclusion in such forward-looking information include the risk that the Company may not be able to complete the Offering or the Offering may be completed on substantially revised terms and conditions; the Offering may be subject to shareholder approval and such approval may not be obtained; the Company may not be able to obtain the necessary regulatory approvals or such approvals may be subject to conditions that are unacceptable to the Company; the proceeds of the Offering may be used for other purposes than as disclosed; Mr. Lang and other insiders may not subscribe or complete his subscription, the Company's efforts in restructuring the wind power business may not be successful; the Company may not emerge from this downturn a stronger company, as well as the risks set out in the risk factors section of Hanwei's Annual Information Form dated March 31, 2009, and the Company's press releases filed subsequent there to, all filed with Canadian securities regulators and available on SEDAR at www.sedar.com.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.
SOURCE HANWEI ENERGY SERVICES CORP.
For further information: For further information: Yucai (Rick) Huang, Chief Financial Officer, Telephone: (604) 685-2239, firstname.lastname@example.org; Kevin O'Connor, Investor Relations, Telephone: (416) 962-3300, email@example.com